The question has loomed over China Evergrande Group for months: Is the world’s most indebted developer “too big to fail”?
Investors finally have their answer. With a flurry of announcements that sent Evergrande bonds tumbling to record lows this week, the company and Beijing have made it clear that billionaire Xu Jiayin’s (許家印) property giant is headed for one of China’s largest-ever debt restructurings.
Barring a last-minute shock, holders of US$19.2 billion in Evergrande dollar notes face deep cuts as the company overhauls its mammoth balance sheet without a government bailout — a process that promises to be long, contentious and potentially