Stablecoin Tether says it does not hold any commercial paper from Evergrande in recent a statement. Evergrande, China’s second-largest property developer by sales, recently warned that it was in danger of defaulting on massive debts. Evergrande is trying to find a way to cut costs and sell off some of its assets to dig its way out.
The struggling real estate giant has listed $300 billion in total liabilities and says it needs to find funds quickly. A government bailout is also a possibility. A commercial paper report from Evergrande at the end of 2021 showed its main unit had $32 billion, just around 10% of its total liabilities.
Evergrande has now had to suspend trading of that unit’s onshore corporate bonds following a downgrade, another red flag pointing towards an impending default. The downgrade notice was sent to Evergrande on Sept. 15 from China Chengxin International. The downgrade from A to AA applies both to the bonds and their issuer rating. A stock exchange filing added that Evergrande was added to a watch list for possible further downgrades in the future.