On Monday, September 13, the real estate company Evergrande warned that it could default on its debt due to a cash shortage.
In the midst of the uncertainty generated by the crisis at the Evergrande company and the possibility of systemic risk, Citibanamex ruled out that its situation is similar to that of Lehman Brothers in 2008 since it is more concentrated in China, so the impact on Mexico it would be limited.
According to the bank’s director of Economic Studies, Sergio Kurczyn, the Wall Street firm had many more links with the rest of the world, in addition, its debt was much greater than the 300,000 billion dollars that the Asian real estate company owes.
“Evergrande is less internationally exposed than Lehman Brothers was, most of Evergrande’s creditors are local, therefore, it is in yuan, there is great control of China,” he said.
However, the specialist considered that the Chinese government allowed that ball to grow a lot and certain bubbles were created in the mortgage market, generating a very important financial shock, which will impact growth and somewhat the financial markets.
Kurczyn considered that it is not something that resembles Lehman Brothers, but something that China will have to face little by little and with a dilemma similar to the American case: if it completely saves Evergrande and its creditors it will generate a “moral hazard”, where after companies think that the government could save them or see spend where they can admit the contagion of their bankruptcy.
“It could slightly affect the growth of the most important sector in China, which is everything that has to do with real estate and real estate, which represents 30% of GDP, and in one of these, this turbulence may affect the prospects for growth of China, which do not affect Mexico much due to our few relationships, “he said.
And it is that on Monday, September 13, the real estate company Evergrande warned that it could default on the payment of its debt due to a shortage of cash, which increased significantly reaching 300 billion dollars and becoming one of the most indebted real estate developers in the world. world.
The firm’s debt is equivalent to 2.04% of the GDP of China, the second-largest economy in the world, which raises the risk of default at a systemic level and recalls the bankruptcy of Lehman Brothers in 2008, which had debts of 613 billion dollars.
In the remainder of 2021, Evergrande will have to pay about $ 669 million in bond-related interest, and in 2022 the projected payment is $ 10.085 million.