@UBS estimates $19 billion of Evergrande's liabilities are made up of outstanding offshore bonds. A potential default could spread to markets outside China as it has huge, high-interest offshore bonds— some with rates as high as 15%.
Here are some basic numbers on Evergrande to give you an idea why many consider it to be #TBTF—Too Big To Fail.
- Current liabilities equivalent to ±2% of China's GDP.
- It has more than 200,000 employees, who themselves and many of their families have invested billions of yuan in the company's WMPs.
- More than 800 projects under construction, more than half of them halted due to its cash crunch.
- Thousands of upstream & downstream companies rely on Evergrande for business, creating more than 3.8 million jobs every year
Here's Caixin’s take on the current situation.
How Evergrande Could Turn Into 'China's Lehman Brothers'
For the past two months, hundreds of people have been gathering at the 43-floor Zhuoyue Houhai Center in Shenzhen, where China Evergrande Group's headquarters occupy 20 floors. They held banners demanding repayment of overdue loans and financial products. Police with riot shields had to be on site to keep things under control.
The demonstrators are construction workers at the property developer's housing projects, suppliers providing construction materials and investors in the company's wealth management products (WMPs).
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