Evergrande’s $32 Billion of IOUs Add to Liquidity Concerns
- Embattled developer ramps up commercial bill issuance
- Implied yields on some bills have climbed as high as 36%
This article is for subscribers only.
As China Evergrande Group tries to quell concerns about its financial health, the property giant has gone to great lengths to publicize its shrinking debt load.
What the developer rarely mentions, however, is that it’s also ramping up issuance of short-term IOUs. While not technically classified as debt, Evergrande’s growing reliance on such financing -- known in China as commercial bills -- suggests the company faces mounting liquidity pressure as banks and bond investors increasingly shy away from providing it with longer-term funds.