China’s dollar-denominated junk (non-investment grade) bonds fell to new year-to-date lows. The prospects for the sector have deteriorated as property developer Hekkeiyuan could default on its dollar-denominated bonds if it fails to pay them on time.
The average price of Chinese dollar-denominated high-yield bonds fell to 66.8 cents on Monday, the lowest since early December, according to a Bloomberg index. The next-to-maturity dollar-denominated bond of Hekkeien fell 1 cent to 11.3 cents on Wednesday, according to data compiled by Bloomberg.
Once China’s largest builder, Green Garden’s dollar-denominated bondholders effectively have 7 days to expireInterest paymentSentiment worsened this week after it said it had not received any. Failure to make payments within the 30-day grace period could qualify as the company’s first default. That would likely exacerbate the years-long property crisis in China and highlight the challenges facing policymakers trying to bail out the sector.
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news-rsf-original-reference paywall">Original title:Country Garden Worries Drag China’s Junk Bonds to 2023 Low(excerpt)
2023-08-10 06:09:02
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