Debt-laden Chinese group Evergrande has managed to pay interest for an offshore bond before a grace period expired on Friday, Oct. 29, but the source of the funds used to make the interest payment remains unidentified, according to Reuters.

The property giant, which averted a default last week by securing $83.5 million for the last-minute payment of interest on a bond, needed to make $47.5 million in coupon payments to bondholders by Friday.

A failure to pay by the Friday deadline would have provoked cross-defaults on all of the group’s $19 billion worth of bonds in international capital markets, in what would have been the second-largest emerging market corporate debt default worldwide, Reuters added.

Notably, Evergrande did not respond to Reuters’ request for comment. The people refused to be identified because of the sensitivity of the matter.

Moreover, Reuters was not able to determine the source of the funds used to make the interest payments. Bloomberg News reported earlier this week that Beijing had urged Evergrande’s founder, Hui Ka Yan, to dip into his own pocket to pay down the company’s debt.

One bondholder said he stayed pessimistic about the future of the developer despite it making the coupon payment.

“I only think they are buying time at this point,” the bondholder responded.

The Guardian reported that even as Evergrande assures funds to make payments, other Chinese developers whose fortunes have been hit by market concerns over Evergrande’s debt have fallen into formal default.

Fantasia Holdings Group Co Ltd, Sinic Holdings (Group) Co Ltd, China Properties Group Co Ltd and Modern Land (China) have all defaulted on dollar debt obligations this month.

According to Reuters, Evergrande missed coupon payments amounting to roughly $280 million on its dollar bonds on Sept. 23, Sept. 29 and Oct. 11, beginning 30-day grace periods for each.

The indebted behemoth still has approximately $338 million in other offshore coupon payments coming due in November and December.

Sign up to receive our latest news!

By submitting this form, I agree to the terms.