Tether says it has no commercial paper from troubled Evergrande

Stablecoin Tether

said in a recent statement that it does not hold any commercial paper from Evergrande. Evergrande, China’s second-largest property developer by sales, recently warned that it is in danger of defaulting on its massive debts. Evergrande is trying to find a way to cut costs and sell some assets to get out of its predicament. Sponsored

The struggling real estate giant has $300 billion in total liabilities and says it needs to raise funds quickly. A government bailout is also a possibility. A report on Evergrande’s commercial paper at the end of 2021 showed that its main unit held $32 billion, or only about 10% of its total liabilities.

Evergrande has now had to suspend trading in the unit’s corporate bonds following the downgrade, another red flag indicating impending insolvency. The downgrade notice

was sent to Evergrande on September 15 by China Chengxin International. The downgrade from A to AA applies to both the bonds and their issuer rating. The stock exchange release added that Evergrande has been added to a watch list for possible further downgrade in the future. Sponsored Sponsored

According to

a

Bloomberg report

, Evergrande managed to raise about $8 billion through August, but that’s just a drop in the ocean compared to what it still owes.

Tether states its position

According to

a

Tether

spokesperson, “Tether does not hold any commercial paper or other debt or securities issued by Evergrande and never has.

As we have indicated in our published statements and our most recent assurance statement with a reporting date of June 30, 2021, the vast majority of the commercial paper held by Tether is contained in issuers rated A-2 and higher.”

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According to Reuters, about 50% of Tether ‘s $62.8 billion in assets held

as of early July 2021 were backed by commercial paper and certificates of deposit.

In a series of tweets

on the Evergrande news, Cinnemhian Ventures partner Adam Cochran said:

IF either Tether or USDC does not melt down in a global collapse though, it would actually be bullish forand cryptocurrencies because if you couldn’t use them to monetize, people would just start converting them to BTC/ETH en masse regardless of the price.

Cochran added that despite not being a well-known name in the West, the failure of Evergrande could have massive side effects.

Chances are that we are currently looking at the next financial crash.

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