The ailing Chinese real estate company Evergrande has transferred the money for a bond interest payment due on September 23 to a trustee, according to an insider.

As the person familiar with the matter told Reuters on Friday, the company is said to have transferred $ 83.5 million in coupon payments to an escrow account with Citibank on Thursday.

The insider confirms a report that appeared on Friday in the state financial newspaper, "The Securities Times".

Accordingly, Evergrande was able to pay off all bondholders before the grace period expired on October 23.

The payment was "a positive surprise," said James Wong, portfolio manager at GaoTeng Global Asset Management Ltd, adding that many had expected a default.

The news will boost bondholders' confidence, Wong said.

The fear of infection

Evergrande missed two coupon payments on its dollar bonds on September 23 and 29, which started a 30-day deadline for payment.

Failure to pay the interest could have resulted in a formal default by the company and default on other Evergrande dollar bonds.

Evergrande is considered the most heavily indebted real estate company in the world.

There is an urgent need to raise funds in order to be able to pay banks, suppliers and bondholders on time.

The company is so big that some experts fear a “risk of contagion” for China's economy and beyond.

Until recently, it was uncertain whether Evergrande would still be serving dollar bonds at all.

Evergrande boss Xu Jiayin initially focused on servicing bonds in the Chinese home market.

Because many small savers there have lent the group a lot of money over the years.

If this cannot be repaid, the country's authorities fear unrest.

With the current interest payment for the dollar bond, Evergrande was initially only trying to gain time, explained a stockbroker.

Further interest payments on bonds will be due in the coming weeks and months.

How it goes now is open.

Investors on the stock exchanges reacted positively - the stock exchanges in China rose - but enthusiasm for Evergrande was limited.

The shares gained a good four percent.

The day before, however, they had also slumped by more than 12 percent after trading in them had been resumed after a long break.

In 2021 the shares lost more than 80 percent of their value.