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The Lehman Brothers moment - China Evergrande's liquidity crisis deepens, report flags interest payment miss

Major banks braced for Evergrande Sept loan interest miss-report S&P further downgrades company to "CC", cites default risk An Evergrande default could pose broader credit risk - Fitch Angry protesters gather at Evergrande Shenzhen headquarters

HONG KONG, Sept 15 (Reuters) - China's major banks have been notified by the housing authority that Evergrande Group (3333.HK) won't be able to pay loan interest due Sept. 20, Bloomberg reported, underlining the broadening impact of the property developer's liquidity crisis.

The troubles ailing the nation's no. 2 property developer have already sparked social anger among investors and homebuyers and raised risks for China's vast financial system.

Ministry of Housing and Urban-Rural Development (MOHURD) held a meeting with the banks this week, the Bloomberg report said on Wednesday, citing sources familiar with the matter. It added that Evergrande is still discussing with banks the possibility of extending payments and rolling over some loans.

The indebted property developer is scrambling to raise funds to pay its many lenders and suppliers, as it teeters between a messy meltdown with far-reaching impacts, a managed collapse or the less likely prospect of a bailout by Beijing. read more

Regulators have warned of broader risks to the country's financial system if the company's $305 billion of liabilities aren't contained.

Evergrande on Tuesday said it has engaged advisers to examine its financial options and warned of cross-default risks amid plunging property sales and lack of progress in asset disposals. read more

The housing ministry did not immediately respond to a faxed Reuters request for comment, and Evergrande also did not immediately respond to a request for comment.

Last week, financial intelligence provider REDD reported Evergrande has told two banks it planned to suspend interest payment due later this month. read more

Rating agency S&P ...

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