Evergrande in default, Fitch cuts rating to RD

Evergrande is officially in default after failing to redeem – even beyond the 30-day guarantee period – a series of dollar bonds. To certify what appears to be ‘the beginning of the end’ is the new rating cut of the Chinese real estate giant – burdened with debts for over 300 billion dollars – implemented by Fitch which has placed Evergrande at ‘RD’ (Restricted Default) level, from the already worrying ‘C’. Together with the main company, the rating of the subsidiaries Hengda Real Estate and Tianji Holding Limited was cut, involved in the issue of the non-repaid bonds, one worth 645 million dollars, with a 13% coupon, and another from 590 million dollars, with a coupon at 13.75%. Fitch has set the level of possible recovery of accrued debts to RR6 – that is, very close to zero.