Two people who have direct knowledge of the matter say that the cash-strapped China Evergrande Group made payments to an offshore bond coupon before Friday’s grace period expired. This was in order to meet its second U.S. Dollar repayment obligation.

EvergrandeChina’s former top-selling developer is now insolvent with more than $300 billion of liabilities. This raises concerns about its future impact on the second largest economy in the world and the global market.

Property developer who secured $83.5 million to pay the final-minute interest payment on a bond last week avoided default, but still needed to send $47.5 million to bondholders in coupon payments by Friday.

Reuters did not reach Evergrande to request comment. Because of the sensitive nature and importance of the issue, they declined to be identified.

Evergrande’s shares rose over 1% during early trading Friday against a 0.4% decrease in Hang Seng Index.

Evergrande skipped coupon payments for its Dollar Bonds, amounting to nearly $280 Million. The 30-day grace period began on each of these bonds.

There are still approximately $338 Million in offshore coupons payments due November/December.

The New York Times earlier reportedA person who was not identified claimed that the developer had made an interest payment.

Cliff Zhao of China Construction Bank International, Hong Kong, said that Evergrande tried to resolve liquidity issues, but it was a bit challenging to raise enough capital to repay all the debt.

“I believe Evergrande will negotiate with its lenders to get a haircut. This will take some time for the market to process and price it in.

Fantasia Holdings Group Sinic Holdings China Properties Group Modern LandAll of them have defaulted this month on their dollar debt obligations.

Sources have reported that other developers who have significant debt in dollars have also suggested the extension of offshore maturities and restructuring their debt in an informal meeting with regulators.

This week’s meeting was held with developers by the China National Development and Reform Commission and State Administration for Foreign Exchange. They advised developers who have large amounts of offshore debt to assess repayment risks and report any difficulties.

Evergrande’s default could have serious consequences for the Chinese economy. Investors are demanding higher risk premiums to increase their exposure.

This has led to an increase in the cost of insurance against China defaulting on its sovereign debt. This cost was at its highest point since 2020, when the pandemic reached its peak.