Last Wednesday, China's Evergrande Group, the world's most indebted property developer, managed to stave off default once again with a snap $148.1 interest payment to foreign bondholders.

It was the biggest payment test yet for the beleaguered real-estate giant, whose survival has been the subject of speculation for many months.

Fears about Evergrande's ability to manage its $300 billion in liabilities have since metastasized and spread throughout bond markets the world over, potentially cutting off Chinese developers from critical offshore credit.

Indeed, the Fed recently warned of potential fallout emanating from Evergrande and, by extension China's faltering property market.

"...Financial stresses in China could strain global financial markets through a deterioration of risk sentiment, pose risks to global economic growth, and could affect the United States," warned the central bank in its stability report.

While Evergrande has yet to default on any of its publicly traded dollar bonds, the timing of its recent payments is undoubtedly enough to leave investors breathless.

Last Wednesday's payment came in less than a day before the 30-day grace period on the debt was set to expire. Just last month, Evergrande made a similarly timed $83.5 million payment to creditors. The developer has billions more in debt set to mature next year, no doubt leaving even further opportunities for nail-biting.

Evergrande's other efforts to raise cash have essentially come up short. Last month it abandoned plans to sell a $2.6 stake in its property services division to another developer, prompting Evergrande to warn it might not be able to service its debts going forward.

Some Chinese regulators have gone so far as to call for Evergrande's founder Hui Ka Yan to use his personal fortune to settle some of his company's liabilities.

Evergrande finds itself the unfortunate poster child for a massive deleveraging campaign that began in earnest late last year.

The campaign is best summed up by the "three red lines," strict rules that limit developers' access to capital based on the health of their balance sheets.

As a company built by borrowing, Evergrande happened to find itself on the wrong side of all three lines. Now, without access to credit, construction on Evergrande's 1,300 plus projects has all but stalled, unfinished projects in which some $202 billion worth of apartments have already been sold upfront.

Besides the three red lines, Beijing has imposed a further 400 so-called "tightening" regulations on real estate companies just this year alone.

Moody's Investment Services recently warned that Beijing's tightening regime risked creating a "negative credit" cycle for some developers.

Meanwhile, as the largest issuer of junk bonds in Asia, Evergrande's woes are pushing up borrowing costs for developers across the board.

Evergrande's own debt currently trades at 20 cents on the dollar, with yields on Chinese junk bonds recently cresting at 25%, the highest in a decade.

Six developers, unable to refinance their debt at this record high rate, have already defaulted. At the same time, defaults on offshore Chinese bonds have reached a record $9 billion.

Rising bond yields offshore, coupled with Beijing's tightening regime onshore leave developers with few options should they need credit.

However, several state-run broadsheets have sent signals that rule changes might be on the horizon to allow developers to raise capital through the domestic bond market. At the same time, several state-run enterprises are calling for higher debt limits to help them acquire struggling developers.

However, when it comes to Evergrande, repaying foreign investors is not a priority, sources told The Wall Street Journal.

According to WSJ's reporting, some 200 task forces have been set up with express orders from Beijing to see Evergrande's unfinished projects through to completion. And, of course,to keep an eye out for any social unrest.