China Evergrande has been labeled a defaulter for the first time, a milestone in months of financial drama that has paved the way for an unprecedented restructuring of the world's most indebted developer.
After a grace period expired on Monday, Fitch Ratings reduced the developer's credit rating to restricted default for failing to make two coupon payments. The credit assessor said the developer didn’t respond to requests for confirmation on the payment, and is assuming it wasn’t made. The downgrade may trigger cross defaults on Evergrande’s $US19.2 billion ($26.9 billion) of debt.
The development marks the beginning of the end for the sprawling real estate empire started 25 years ago by founder Hui Ka Yan, setting off a lengthy battle over who gets paid from what remains.