Forensic Analyst

Jason Yap, CFA

Forensic Accounting

<ul>
<li>On 6 December 2021, Evergrande failed to make a crucial coupon payment after expiry of 30 day grace period, triggering default concerns.</li>
<li>Fitch described, and Bloomberg concurred, that this was a "<em>restricted default</em>". We discuss why this distinction might not be relevant for evaluating an investment interest in Evergrande's shares or bonds. </li>
<li>We also discuss the sector outlook and highlight why a contrarian long term play on well capitalised property developers might be quietly unfolding.</li>
</ul>


On 6 December 2021, Evergrande failed to make a crucial coupon payment after expiry of 30 day grace period, triggering default concerns.
Fitch described, and Bloomberg concurred, that this was a "restricted default". We discuss why this distinction might not be relevant for evaluating an investment interest in Evergrande's shares or bonds. 
We also discuss the sector outlook and highlight why a contrarian long term play on well capitalised property developers might be quietly unfolding.


Evergrande (3333 HK)'s "Restricted" Default - Just Semantics?