China Evergrande Group has today paid an onshore bond coupon due, four people with knowledge of the matter said, amid concerns about a possible offshore default by the cash-strapped developer later this week.
Hengda Real Estate Group Co, Evergrande's flagship unit, has remitted funds to pay an onshore bond coupon of 121.8 million yuan ($19m), the sources said.
One of the people said Evergrande, China's second biggest developer, needs to prioritises its limited funds towards domestic market where the stakes are much higher for the country's financial system.
The liquidity crisis at Evergrande, which has $300 billion in debt and has missed a series in bond payments, has roiled global markets.
High-yield bonds issued by Chinese property developers have been especially hammered.
An Evergrande bond due March 23, 2022 will officially be in default if the company does not make good after a 30-day grace period for a missed coupon payment that had been due on September 23.
But the offshore bond market has responded positively after China central bank's assuring comment and coupon payments of two major developers.
Sunac China, which has a $27.14m payment due today, has paid its bondholders, a source with direct knowledge of the matter said.
Kaisa Group said yesterday it has paid a coupon due October 16 and it plans to transfer funds for a coupon worth $35.85m due October 22 on Thursday.
In the past few days, the People's Bank of China has said spillover effects on the banking system from Evergrande's debt problems were controllable and that China's economy was "doing well".
