S&P Ratings comments on Evergrande

  • Believes the government wants to unwind Evergrande in a controlled fashion
  • Or at least let an orderly debt restructuring take place
  • A big test for Evergrande will be in March and April, when large repayments are due
  • Evergrande has lost capacity to sell new homes, which means its main business model is effectively defunct

This is all nothing new but the first two points are they key ones to try and pay attention to or at least look for signs about. It all boils down to how Chinese authorities will want to handle the debt collapse and that will transfer to market confidence/anxiety.

But best be reminded that while Evergrande is the biggest name on the chopping block, it isn't the only one facing such dire circumstances. Kaisa is the other big name to be mindful about alongside other Chinese property developers in general.