China’s second-largest property developer may end up defaulting, a prospect that is sending shock waves across global markets .
Evergrande is $300 billion in debt and warned investors it may collapse if it can’t raise capital quickly. Shares of Evergrande’s stock plummeted on Monday by about 10% after falling roughly 80% over the past six months.
There are concerns that a collapse of Evergrande, which holds 6.5% of China’s total property sector debt, could spell economic catastrophe similar to when U.S. investing giant Lehman Brothers declared bankruptcy in 2008.
While Evergrande was supposed to repay interest payments on some loans on Monday, officials in China have reportedly told the major banks they won’t be paid. A collapse could ricochet