Fitch slices Evergrande, units

Fitch Ratings said it downgraded to RD from C the long-term foreign-currency issuer default ratings of China Evergrande Group and its subsidiaries, Hengda Real Estate Group Co., Ltd. and Tianji Holding Ltd.

However, the agency affirmed the senior unsecured ratings of Evergrande and Tianji at C with an RR6 recovery rating as well as the Tianji-guaranteed senior unsecured notes issued by Scenery Journey Ltd. at C with an RR6 recovery rating.

“The downgrades reflect the non-payment of coupons due Nov. 6, 2021, for Tianji's $645 million 13% bonds and $590 million 13¾% bonds after the grace period lapsed on Dec. 6. “The non-payment is consistent with an RD rating, signifying the uncured expiry of any applicable grace period, cure period or default forbearance period following a payment default on a material financial obligation,” Fitch said in a press release.

Neither the company nor the trustee have made any announcement regarding the coupon payments that were due Nov. 6 for the two Tianji bonds after the grace periods lapsed.

“In addition, the company did not respond to our request for confirmation on the coupon payments. We are therefore assuming they were not paid,” Fitch said.

The non-payment triggered an event of default on Evergrande’s and Tianji’s other U.S. dollar-denominated bonds, the agency noted. If the bond trustee or holders of at least 25% of the total principal decide, those bonds would become immediately due.

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