Evergrande Woes

Evergrande Group ($EGRNF@China), China's second-biggest property developer by sales, has come under increasing scrutiny in recent months as the company grapples with a severe liquidity crisis due to a mounting debt pile. Possible contagion from default on Evergrande's obligations has rattled markets. With $300 billion in outstanding debt, the company's potential failure risks setting off a chain reaction in China and overseas markets. About 67 percent of Evergrande's debt is cash that customers have paid towards properties that have not been completed. The financial position of the other Chinese property developers also took a hit following rules outlined by the Chinese government to rein in borrowing costs of real estate firms. Some economists have warned that the collapse of Evergrande could have global implications; others predict little global impact beyond some market turbulence. As of Friday’s close, the company’s Hong Kong-listed shares have plunged more than 80% year-to-date.