Fitch downgrades Chinese property developer Evergrande and subsidiaries Hengda and Tianji from C - close to default - to RD - limited default.
6 November Tianji failed to pay $645 million in bond coupons. A month later, 6 December, the company did not pay coupons for another 590 million.
Evergrande is the second largest construction company in China. Evergrande has a total debt of about $ 300 billion. The default of such a company can negatively affect the industry, as banks will cut loans to developers, and house prices will fall. Banks will also suffer from a possible series of defaults, who lend to builders.
In the short term, all this could have a bad effect on Chinese stocks., long-term — on the desire of large foreign investors to invest in the country's economy.
