The credit ratings agency has downgraded the company and its subsidiaries to “restricted default,” meaning that the firm has failed to meet its financial obligations.
Fitch said the downgrade reflects the company’s inability to pay interest due earlier this week on two dollar-denominated bonds.
The payments were due a month ago, and grace periods lapsed on Monday.
Fitch noted that Evergrande made no announcement about the payments, nor did it respond to inquiries from the ratings agency.
“We are therefore assuming they were not paid,” Fitch said.
Evergrande has about US$300 billion ($420 billion) in total liabilities, and analysts have worried for months about whether a default could trigger a wider crisis in China’s property market, hurting homeowners and the broader financial system.
The US Federal Reserve warned last month that trouble in Chinese real estate could damage the global economy.
Evergrande did not immediately respond to a request from CNN Business for comment.
However, the company had warned this may be coming. In a stock exchange filing last Friday, it said it might not have enough funds to meet its financial obligations.
At that time, it said it was planning to “actively engage” with offshore creditors on a restructuring plan.
Fears of default sent shares of Evergrande plummeting 20 per cent on Monday.
So far this year, the stock has lost 87 per cent.
The company had been scrambling for months to raise cash to repay lenders, and founder chairman Xu Jiayin has even been selling off personal assets to prop up its finances.
It previously appeared to avoid default on any of its offshore bonds by paying overdue interest before their grace periods expired.
Now, though, that streak has ended.