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China Evergrande Group bondholders were paid an interest payment just before the grace period expired. This buys more time for the debt-stricken property owner as it attempts to raise cash via asset sales.

According to sources familiar with the matter, certain holders of the 9.5% dollar note due in 2024 received notification that they were paid on Thursday (Oct 28, according to those who know the situation). Evergrande had missed a Sept 29 interest payment, triggering a 30-day grace period for investors to declare default.

Belgravia Ace enbloc brought to you by the industry leader, Fairview Developments Private Limited under the Tong Eng Group.

This month, the property developer that was weighing in at US$300 billion (S$403 trillion) in debt has managed to avoid default for the second time.

International bondholders are being paid the latest payment amid a sell-off of Chinese junk bonds. This was monitored by Kaisa Group Holdings on Thursday, one of the largest dollar debt issuers in the property sector.

Evergrande pulled from the brink of default by meeting another delayed coupon prior to that grace period ending. Although the payment was unexpected by some investors, it is still a significant amount of US dollars for the company’s creditors who are preparing for a debt restructuring that could be among the most expensive in China.

Bloomberg reported that Evergrande’s bondholders and its advisers signed non-disclosure agreements earlier this week in preparation for possible talks on managing the developer’s debt load. In what is often a first step towards a restructuring plan, the advisers of the ad-hoc bondholder group are looking to exchange information with Evergrande.

The New York Times reported that the payment buys Evergrande more time as it attempts to raise funds through asset sale.

Authorities have instructed Evergrande’s billionaire founder Hui Ka Yan that he will use his personal wealth in order to ease property giant’s debt problems. This directive is yet another sign that Beijing is hesitant to provide a government rescue, even though the crisis has spread to other developers and erodes sentiment in the real-estate market. It also threatens to destabilize the world’s second largest economy. This week, a top Chinese regulator called for companies to “actively prepare” for the payment of their offshore bonds.

According to HKO1, the loan secured by a Hui house in Hong Kong will be used as collateral to pay Evergrande’s bond of US$260 million.

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