Chinese builder in debt jam says it will make bond payment

BEIJING (AP) — A Chinese real estate developer that is struggling to avoid defaulting on billions of dollars of debt reassured jittery global markets at least briefly Wednesday by announcing it will make an interest payment due this week.

The Chinese government, meanwhile, kept investors guessing about whether it might intervene.

Evergrande Group’s struggle to comply with financial limits regulators imposed to curb rising debt levels has prompted fears a default might cause global shockwaves. Economists say banks and bondholders are likely to lose money if Evergrande restructures its $310 billion debt but Beijing has the resources to prevent a Chinese credit crunch.

The government wants to avoid appearing to arrange a bailout as it tries to force private companies to cut their debt loads but probably will try to protect families that paid for apartments that are yet to be built, economists say. That would cause bigger losses for other creditors.

Evergrande, one of China's biggest private sector conglomerates, said it will make a payment due Thursday on a 4 billion yuan ($620 million) bond denominated in Chinese yuan.

A company statement said details were “settled in negotiations outside the market” but gave no indication whether that meant any change in the payment. The bond has a 5.8% interest rate, which would make the normal amount due 232 million yuan ($36 million) for one year.

Evergrande gave no information on possible future payments including a bond denominated in U.S. dollars in March.

“The silence from Beijing is adding to market nervousness,” Venkateswaran Lavanya of Mizuho Bank said in a report.

Still, the Shanghai Composite index bounced back from early losses on Wednesday, gaining 0.4%. Hong Kong's market, which has been jolted by Evergrande's...