Evergrande's Likely Failure

[Raptor]

This is a an article about the PRC's preps for the failure of Evergrande.

https://www.barrons.com/articles/asian-markets-evergrande-deadline-51632391315?siteid=yhoof2

The Chinese real estate giant also said it had "resolved" the repayment of an onshore bond Wednesday, but is facing an $83.5 million interest-payment deadline on a dollar-denominated bond Thursday.

That payment, which is likely to be the focus of overseas investors like BlackRock (BLK), HSBC (HSBC), and UBS (UBS), who are major Evergrande bondholders, includes a 30-day grace period.

There is a bond payment due today in USD. This payment will shed some more light on this opaque
situation. Also remember that BLK, HSBC & UBS are fund managers. They likely do not hold much Evergrande debt (opinion here not verified fact) on their balance sheets, but rather as fund holdings held by retail and institutional investors.   

Here are the top funds with the highest exposure to Evergrande bonds, according to Morningstar.

Fidelity Asian High-Yield Fund
UBS (Lux) BS Asian High Yield (USD)
HSBC Global Investment Funds - Asia High Yield Bond XC
Pimco GIS Asia High Yield Bond Fund
Blackrock BGF Asian High Yield Bond Fund
Allianz Dynamic Asian High Yield Bond
— CNBC's Brittany Dawe contributed to this report.

amid concerns that Evergrande's failure could cause a liquidity crisis in China, where domestic banks hold most of the group's debt, the Chinese central bank injected some 110 billion yuan ($17 billion) into the banking system Thursday. That's the largest injection of cash through open-market operations since late January, according to Bloomberg, and the fourth injection in recent days.

[Mr. E. Monkey]

Here's another decent article that provides some background information for people as clueless on the subject as me  :  https://www.cnbc.com/2021/09/17/china-developer-evergrande-debt-crisis-bond-default-and-investor-risks.html

The government is likely to step in due to how important Evergrande is, according to analysts.
[/size]"Evergrande is such an important real estate developer, and it would be a strong signal if anything happened to it," said Dan Wang, an economist at Hang Seng Bank. "I believe there will be some supporting measures from the central government, or even the central bank, trying to bail out Evergrande."
[/size]But a restructuring could be more likely, according to other analysts.
[/size]"The most likely endgame is now a managed restructuring in which other developers take over Evergrande's uncompleted projects in exchange for a share of its land bank," Williams of Capital Economics said in a note last week.
[/size]

[Mr. E. Monkey]

One this is sure, it will be interesting to see how this plays out.  Considering other events and policies taking place in China these days, I wouldn't be surprised if the government stepped in to try to avoid any potential embarrassment.  I don't think they want to look weak or "unmanly," after all.