Free Republic
Browse · Search
Topics · Post Article

Skip to comments.

Chinese Developers Have Billions in Debt Off Balance Sheet: JP Morgan
Epoch Times ^ | 10/10/2021 | Fran Wang

Posted on 10/10/2021 8:29:56 PM PDT by SeekAndFind

China’s embattled developers, Evergrande and other property companies, have reportedly shifted billions of dollars in debt to off-balance sheet vehicles, according to recent research from investment bank JPMorgan. Once this additional debt is counted in, the leverage ratios rise distinctly.

Those property developers have utilized the tactic to help comply with new borrowing cap rules introduced by the Chinese regime last year, reported Reuters citing the JPMorgan research.

The bank’s China and Hong Kong property analysts say that Evergrande’s case appears to be the most extreme.

“It is possible that the real gearing could be even higher, as data on some off-balance sheet debt is not publicly available,” the JPMorgan analysts added, noting that the so-called “disguised” debt added up to 55 percent of Evergrande’s overall debt.

Balance sheets usually provide a snapshot of a company’s finances as of the date of publication, showing what it owns and owes.

Evergrande appears to have shifted some of its interest-bearing borrowings to debt held off its balance sheet, as well as to non-debt instruments such as “commercial paper, wealth management products, and perpetual capital securities,” according to the analysts.

They estimate the company’s net gearing was at least 177 percent in the first half of this year, rather than the 100 percent reported.

Net gearing refers to a company’s ratio of debt to equity.

Evergrande reported 572 billion yuan ($88.8 billion) in interest-bearing liabilities as of June 30 in its last financial disclosure (pdf), down about 145 billion yuan ($22.5 billion) from the end of 2020. Interest-bearing debt was reduced primarily through deferred payables to suppliers, Chinese financial outlet Caixin reported on Sept. 22.

(Excerpt) Read more at ...

TOPICS: Business/Economy; Culture/Society; Foreign Affairs; News/Current Events
KEYWORDS: china; debt; evergrande; property

1 posted on 10/10/2021 8:29:56 PM PDT by SeekAndFind
[ Post Reply | Private Reply | View Replies]

To: SeekAndFind

Has that yelling woman been advising them on financial instruments, stratergy, and policy?

2 posted on 10/10/2021 8:31:52 PM PDT by Paladin2 (Critical Marx Theory is The SOLUTION....)
[ Post Reply | Private Reply | To 1 | View Replies]

To: Paladin2

Yellin has connections to the Clinton Crime Family going back to the 1990s.

3 posted on 10/10/2021 8:33:35 PM PDT by BenLurkin (The above is not a statement of fact. It is either opinion, or satire. Or both.)
[ Post Reply | Private Reply | To 2 | View Replies]

To: SeekAndFind

No real estate entity can that sort of leverage. Default is coming.

4 posted on 10/11/2021 12:54:02 AM PDT by Jimmy Valentine (DemocRATS - when they speak, they lie; when they are silent, they are stealing the American Dreams)
[ Post Reply | Private Reply | To 1 | View Replies]

To: BenLurkin

And our vaunted FBI and CIA looks the other way in lieu of going after the Clinton Crime syndicate and Biden Crime family.

5 posted on 10/11/2021 4:26:06 AM PDT by Joe Boucher (Dementia Joe and the Whore, leaders of the Free world. ( F-you dementia Joe.))
[ Post Reply | Private Reply | To 3 | View Replies]

Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.

Free Republic
Browse · Search
Topics · Post Article

FreeRepublic, LLC, PO BOX 9771, FRESNO, CA 93794 is powered by software copyright 2000-2008 John Robinson