hong kong cashstrapped china evergrande group left its offshore bondholders guessing whether it would pay interest on a bond coupon due wednesday despite agreeing to settle debt with a chinese bank in a 15 billion stake divestment dealwith liabilities of 305 billion evergrande has sparked concerns its woes could spread through chinas financial system and reverberate around the world a worry that has eased with the chinese central bank vowing to protect homebuyer interestevergrande said in an exchange filing that it would sell a 999 billion yuan 15 billion stake it owns in shengjing bank co ltd to a stateowned asset management companythe bank one of evergrandes main lenders demanded all net proceeds from the sale go towards settling the developers debts with shengjing as of the first half last year the bank had 7 billion yuan in loans to evergrande according to a report by brokerage ccb international citing news reportsthe move underscores how evergrande once chinas topselling developer and now expected to be one of the largestever restructurings in the country is prioritising domestic creditors over offshore bondholders it also highlights the role stateowned enterprises may play in evergrandes denouementthe company is due on wednesday to make a 475 million bond interest payment on its 95 march 2024 dollar bondthe company missed a payment deadline on a dollar bond last week a day after its main property business in china said it had privately negotiated with onshore bondholders to settle a separate coupon payment on a yuandenominated bondevergrandes silence on its offshore payment obligations has left global investors wondering if they will have to swallow large losses when 30day grace periods end for coupon payments due on sept 23 and sept 29a spokesperson for evergrande did not immediately respond to reuters request for commentwe are in the waitandsee phase at the moment the creditors are organising themselves and people are trying to figure out how this falling knife might be caught said an advisor hired by one of the offshore evergrande bondholdersthey failed to pay last week i think they will probably fail to pay this one that doesnt mean necessarily theyre not going to pay theyve got the 30day grace period said the advisor declining to be named due to sensitivity of the issuegovernment prodding once the face of chinas frenzied building boom evergrande has now become the face of a crackdown on developers debts that has spurred volatility in global markets and left large and small investors sweating their exposureevergrandes troubles slammed global stock markets earlier this monthin the weeks since some global investors have shifted their focus to political wrangling in washington over the us debt ceiling and a rise in treasury yields that has pressured stocksany negative surprise by evergrande could give stock market bears more ammunitionrating agency fitch on wednesday downgraded the longterm foreigncurrency issuer default ratings idrs of evergrande and its subsidiaries hengda and tianji citing likely nonpayment of offshore bond interest last weekbeijing is prodding governmentowned firms and statebacked