S&P Global downgrades Evergrande to default for failed bond payments

• S&P Global became the second credit-risk assessor to downgrade Evergrande’s credit rating

• On December 9, rival credit risk-assessor, Fitch Ratings. downgraded Evergrande to restricted default

S&P Global became the second credit-risk assessor to downgrade Evergrande’s credit rating to default after the Chinese real estate giant failed to make U.S. dollar bond payments by the end of a grace period earlier this month.

S&P Global changed its rating on Evergrande and its offshore financing arm Tianji Holding Ltd. from CC to “selective default,” a week and a half after the real estate firm defaulted on its debt payments.

Earlier this month, Evergrande defaulted on interest payments worth $82.5 million, which were originally due November 6, on two sets of dollar bonds by the end of a 30-day grace period. The debts were issued by a unit known as Scenery Journey Ltd., reported Wall Street Journal.

On December 9, rival credit risk-assessor, Fitch Ratings. downgraded Evergrande and Kaisa Group Holdings’ credit rating to “restricted default after the former’s $82.5 million default and the latter’s $400 million bond payments default.

Previously, global credit-rating agency, Moody’s Investors Service, cut its senior unsecured ratings on Evergrande and its subsidiaries to “C,” the lowest level on its 21-notch rating scale. This was before Evergrande’s non-payment of its dollar-bond coupons.

Evergrande reported around $300 billion in liabilities and is struggling to avoid defaulting on its international bonds. The cash-strapped real estate developer has been scrambling to sell assets to make interest payments for the same. It has sold off two jets, and stakes in a Chinese bank and a Hong Kong residential project to raise money.

Inputs from WSJ