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That only happens after default, and default happens when a loan can't be repaid. Evergrande wasn't bankrupt yesterday, so the bankruptcy rules don't apply toda
by Arnt 5y ago
That only happens after default, and default happens when a loan can't be repaid. Evergrande wasn't bankrupt yesterday, so the bankruptcy rules don't apply today. They may tomorrow, for the loans that weren't repaid today (or in the past).
- DebtDeflation 5y agoYeah, people seem to forget that "default" is a technical legal term meaning failure to fulfill a contractual obligation, in this case failure to make an interest payment on a bond by a specified date. If they didn't make the payment today, then they are in default. Bankruptcy is a more nebulous term and can refer to the filing, the court proceeding, or the final judgement. Being in default is a matter of fact and is not dependent on any of that.
- raesene9 5y agoThe "interesting" piece with this default is whether it triggers further cross-defaults. A couple of articles I read suggested that if Evergrande defaults on one bond it can trigger instant defaults on others.