The crisis at one of the nation's biggest property developers has hammered investor sentiment, rattled the key real estate market and fueled fears of a spillover into the wider economy.

The firm is reported to have missed a series of offshore bond payments and while it had a 30-day grace period on some of them, there had been a general expectation it would not be able to meet its obligations.

But it made a key payment Thursday, Bloomberg News reported citing sources close to the situation, with international bondholders of a 9.5-percent dollar note told they had been paid.

The news will further soothe fears over the property giant's future, after the company announced Monday it had restarted work on more than 10 projects in six locations.

Last week the state-backed Securities Times said the developer had wired US$83.5 million for an overseas payment first due on Sept. 23.

Analysts warn the fundamentals of the company remain shaky, with several other dollar bond payments to navigate before the end of the year.

Evergrande plunged into crisis after Beijing began clamping down on the country's colossal property sector — which some estimates say accounts for a quarter of the economy — in a bid to rein in excessive debt.

China now appears to be rolling back some of those regulations, however, with the Securities Times reporting Friday that local banks had begun easing some credit controls on homebuyers and developers in the wake of orders from the central bank.

 

Own wealth

Meanwhile, Chinese authorities have told Evergrande founder Xu Jiayin, once the country's richest man, to use his personal wealth to alleviate the embattled company's debt crisis, according to media reports.

The liquidity crunch at one of China's biggest property developers has hammered investor sentiment and rattled the country's crucial real estate market, while fanning fears of a possible contagion of the wider economy.

Last week, the group unexpectedly paid interest on an offshore bond just before a Saturday deadline, averting a default and giving it a much-needed reprieve.

But Bloomberg News reported Tuesday that Beijing has pushed Xu — also known as Hui Ka Yan in Cantonese — to dip into his own pocket to help pay off some of the company's debts, citing people familiar with the matter.

The report said the directive from Beijing came after his company missed an initial bond interest payment due on Sept. 23.

However, it is unlikely that Xu's personal sacrifice would make much of an impact on Evergrande's liabilities of more than $300 billion, with Bloomberg reporting his fortune at less than $8 billion.

Xu, 63-year-old, was once the wealthiest person in China, worth more than $40 billion just a few years ago, before Evergrande's troubles began.

People cited by Bloomberg also said that local governments across China are monitoring the developer’s bank accounts to ensure company cash is used to complete unfinished housing projects and not diverted to pay creditors. 

The crackdown on China's indebted real estate sector that prompted Evergrande's cash crisis has also hit several other builders, with Sinic and Fantasia among those failing to make debt payments.

On Wednesday ratings agency Fitch downgraded another, Modern Land, saying it failed to make a $250 million payment this week.

A key Chinese regulator also urged companies to meet their offshore bond payments in a statement on Tuesday.

Evergrande's woes come as Chinese President Xi Jinping ramps up rhetoric of his "common prosperity" campaign designed to equal out wealth and tighten oversight of home-grown private giants.