China Evergrande, the former real state giant, is officially confirmed defaulted on Dec. 17th by credit rating agency Standard & Poor’s Global as it failed to pay its bond payments earlier this month.

S&P said Evergrande had requested the rating to be withdrawn following a downgrade to ‘selective default’. Rating companies use the term to designate a bond that has missed a payment, but not all bonds.

But S&P said that “Evergrande, Tianji, or the trustee have made no announcement or any confirmation with us on the status of the coupon payments.”

Evergrande was already downgraded to a restricted default on Dec. 9th by Fitch Ratings as the real estate giant failed to make coupon payments worth $82.5 million.

The Financial Times reported that a total of 367 civil lawsuits have been filed against Evergrande between August 24th to December 9th. The overall claim amounted to 84 billion yuan, or US$13 billion.

The legal challenges showed that Chinese creditors had soon realized the real estate developer would not be able to repay its debts.

More than 40 banks are recovering a total of 22 billion yuan, or US$3.4 billion, in overdue loans from Evergrande. The shock from Evergrande’s downfall has been estimated to hit banks first.

Facing a crisis, Beijing has repeatedly sought to reassure investors but has yet to reveal a plan on how to stabilize Evergrande.

Evergrande’s liquidity crunch is more complicated than expected, according to representatives from state-owned institutions currently running a newly established risk management committee in Evergrande.

“Currently, there’s no rush to introduce any disposal plans,” said a source close to the regulators.

Beijing has previously encouraged government-owned companies and state-backed property developers to buy some of Evergrande’s properties.

However, according to China’s Central Economic Work Conference last week, businesses must come up with self-rescue provisions, while regulators and local governments should make plans to manage and mitigate financial risk.

China’s real estate debt is estimated to be as high as RMB 10.5 trillion by outsiders, accounting for roughly half of the world’s non-performing debt. The Fed had cautioned that if China’s real estate market deteriorated, the country’s problems would expand to the U.S.

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