The propery developer has missed a series of offshore bond payments and while it had a 30-day grace period on some of them, there had been an expectation it would not be able to meet its obligations.

Evergrande's woes have snowballed for months and its dwindling resources and vast liabilities have wiped out 80 percent of its value.
Evergrande's woes have snowballed for months and its dwindling resources and vast liabilities have wiped out 80 percent of its value. (Reuters)

Chinese property developer Evergrande has reportedly averted default for the second time this month after making an overdue interest payment to offshore bond holders less than two weeks before a grace period expired.

Evergrande made a key payment on Thursday, Bloomberg News reported citing sources close to the situation, with international bondholders of a 9.5 percent dollar note told they had been paid.

The crisis at one of the nation's biggest property developers has hammered investor sentiment, rattled the key real estate market and fuelled fears of a spillover into the wider economy.

The firm is reported to have missed a series of offshore bond payments and while it had a 30-day grace period on some of them, there had been a general expectation it would not be able to meet its obligations.

Evergrande's woes have snowballed for months and its dwindling resources set against its vast liabilities have wiped out 80 percent of its value.

The news will further soothe fears over the property giant's future, after the company announced on Monday it had restarted work on more than 10 projects in six locations.

Easing credit controls

Last week, Securities Times said the developer had wired $83.5 million for an overseas payment first due on September 23.

Chinese authorities have also told Evergrande founder Xu Jiayin – once the country's richest man – to use his personal wealth to alleviate the company's debt crisis, according to media reports.

Analysts warn the fundamentals of the company remain shaky, with several other dollar bond payments to navigate before the end of the year.

Evergrande plunged into crisis after Beijing began clamping down on the country's colossal property sector – which some estimates say accounts for a quarter of the economy – in a bid to rein in excessive debt.

China now appears to be rolling back some of those regulations, however, with the Securities Times reporting on Friday that local banks had begun easing some credit controls on homebuyers and developers in the wake of orders from the central bank.

READ MORE: Property giant Evergrande pays overdue interest on offshore bond

Source: AFP