Evergrande set for restructuring, with no word on first formal default

A housing complex is in Beijing.

Analysts say that Evergrande is going to restructure its debt, which would include all of its offshore public bonds and private debt.

The troubled real estate developer, swamped by $300 billion of liabilities, said Tuesday that it is setting up a risk management committee which will help mitigate and eliminate future risks for the firm. The world's most indebted property developer is having difficulty raising funds to pay suppliers.

The developments lifted its shares from a record low and they bounced back on Tuesday. The stock of other Hong Kong-listed property firms jumped as well.

Sentiment has been boosted by China's move toward easing. The reserve requirement ratio, or the amount of cash that banks must hold as reserves, will be cut for the second time this year. That frees up more than two hundred billion dollars to boost growth.

St. James's Place head of Asia investment advisory and communications Martin Hennecke told CNBC on Tuesday that a restructuring of Evergrande's offshore public bonds and private debt obligations will be taking place soon.

The bonds of Jumbo Fortune and Scenery Journey are likely to be private debt obligations, according to Luther Chai of CreditSights.

The 30-day grace period ended Monday, and there was no word from the developer on whether it had paid any interest. Analysts said it was unlikely that the interest would be paid. Evergrande plans to engage with offshore creditor to come up with a viable restructuring plan.

It would be the first time that a firm would default if it did so, as it has managed to make the last few interest payments at the last minute.

Analysts said that China's shift toward monetary policy easing would help the troubled real estate market.

Chinese policymakers have shifted their rhetoric recently, with an emphasis on easing, which includes the reserve requirement ratio cut, a wider easing of curbs on the real estate sector, and a pledge for stabilization in 2022.

The current crisis is caused by the government's tough stance on reducing debt and other tightening in the real estate sector.

The PBOC decision was followed by a statement from the communist party central committee that said they would try to stabilizing the economy in the next few years.

The real estate sector in China has been hit by the government's moves to tame debt. The authorities implemented the three red lines policy last year. The policy places a limit on debt in relation to the firm's cash flows, assets and capital levels. After years of growth, that started to rein in developers.

Concerns about a potential spillover into the rest of China's real estate industry or even the broader economy have roiled global markets. Other Chinese real estate developers started showing signs of strain as the debt crisis unfolded, with some missing interest payments and others defaulting on their debt altogether.