The Rising Influence of Rising Affluence

[StocksGoneWild]

Here is a list with names you will hear very often in the next weeks:

1. Country Garden
2. Poly Real Estate Group
3. Evergrande
4. Vanke
5. Sunac China Holdings
6. Longfor Properties
7. Seazen Holdings
8. China Resources Land
9. China Overseas Land & Investment Ltd.
10. R&F Group

All of them are going to default, all of them are hiding humongous amounts of bad debt. You think the 130% debt to GDP ratio of the US is bad? Wait until they tell you that China is actually indebted with 2400% to GDP. This is Japan 1991 all over again.

https://www.prnewswire.com/news-releases/evergrande-officially-defaulted---dmsa-is-preparing-bankruptcy-proceedings-against-evergrande-group-301421327.html

In order to be able to file for bankruptcy against the company as a creditor, DMSA itself invested in Evergrande bonds, whose grace period expired today (Nov. 10, 2021). In total, Evergrande would have had to pay $148.13 million in interest on three bonds no later than today. "But so far we have not received any interest on our bonds," explains Metzler. He adds, "With banks in Hong Kong closing today, it's certain that these bonds have defaulted."

Particularly problematic for Evergrande: all 23 outstanding bonds have a cross-default clause. "This means that if a single one of these bonds defaults, all 23 outstanding bonds automatically have 'default' status" DMSA senior analyst Metzler knows. However, this does not automatically result in a bankruptcy for Evergrande Group. To determine bankruptcy, a insolvency petition must be filed with the court. This can be done either by the company itself or by one or more of the company's creditors. And this is precisely what is now planned. Metzler: "DMSA is preparing bankruptcy proceedings against Evergrande. We are already holding talks with other investors in this regard. We would be pleased if other investors were to join our action group."

For the DMSA expert, it is clear: "As soon as a court opens insolvency proceedings, Evergrande will also be officially bankrupt - and that is only a matter of days."