ING on Evergrande's offshore coupon, USD83.5m ... due on a five-year dollar note today
- Missing that payment today would still leave a 30-day grace period before this is registered as a default
- our guess is that Evergrande will make full use of that window to buy time.
(bolding mine ... makes sense)
Further:
- What seems to be emerging from all of this is a playbook for the resolution of this episode with re-payments focussed on the domestic investor base. Foreign bonds are already pricing in default with low recovery rates, and although that sounds bad, it is now in the price so perhaps the market has done most of its adjustment already.
- Western media continues to chunter on about Lehman's and subprime in a nervy manner, and it feels as if some markets are looking for an excuse to take profits at these levels. So it's not clear that we are out of the woods just yet.
