S&P dumps Chinese property giant Evergrande into Default

The poster child of China's property crisis China Evergrande Group was officially declared in default by credit rating agency S&P Global on Friday after the sprawling firm missed a bond payment earlier this month. After Evergrande announced that it may not be able to meet all of its financial obligations, the crisis-hit firm defaulted on some of its overseas bonds. It has now reportedly entered a debt restructuring process with Chinese authorities that may include the sale of some of its founder's personal assets.

China will focus on supporting “quality” property developers to acquire real estate projects of large companies faced with risks and difficulties, PBOC-backed Financial News reported, citing a notice from the central bank and the banking regulator. The regulator encourages banks to provide property project loans in an appropriate, orderly manner, according to the report. China also supports quality developers selling debt instruments in the interbank market to fund project acquisitions. The PBOC and state-asset regulators held a meeting recently with some large private and state-owned real estate companies to encourage them to acquire quality projects from distressed developers. The acquisitions should be conducted in a market-oriented and law-based manner.

The Chinese government has been focused on ensuring developers deleverage in the past five years, and highly leveraged firms will look to dispose of assets, presenting for onshore capital, investment and fund managers.

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