China’s Evergrande ponzi-scheme robs Peter to pay Paul


By looking at last week’s market action you might think that the Evergrande developer crisis is over. Developer spreads ripped in and equities soared:

Goldman’s policy monitor has eased but it is marginal:

The truth of it is more complex:

Some Chinese property developers recently announced plans to issue debts, fuelling market expectations for easing financing amid a sector-wide cash crunch.

China Merchants Shekou Industrial Zone Holdings Co., Ltd, an industrial property developer, plans to issue 3 billion yuan of medium-term notes in the interbank market, including 1.5 billion yuan of 3-year notes and 1.5 billion yuan of 5-year notes and the proceeds will all be used to repay maturing bank loans, according to information disclosed on the website of the Beijing Financial Assets Exchange on Friday.

Last time the company issued medium-term notes was December 1 last year, when the company issued 1.6 billion yuan of notes,…

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