Yield premiums on high-grade Asian dollar bonds were on course for the sharpest monthly jump since March as concerns about China’s ailing economy and property woes weighed on demand.
(Bloomberg) — Yield premiums on high-grade Asian dollar bonds were on course for the sharpest monthly jump since March as concerns about China’s ailing economy and property woes weighed on demand.
The credit spreads have widened by 15 basis points so far in August, set for the biggest such move since March, according to a Bloomberg index, while the yield premium on dollar notes from Chinese investment-grade issuers increased by 20 basis points. More than two dozen bonds with the biggest spreads blowout are from Chinese borrowers or those with significant exposure to the country.
China’s post-pandemic economic recovery has faltered in recent months, as exports weakened and a housing crisis intensified. Signs of financial stress are aplenty, with a property giant on the verge of default and a major shadow bank’s missed payments triggering fears of worsening contagion.
Vanke Real Estate (Hong Kong) Co.’s bond due in March 2024 has seen a spread widening of more than 800 basis points this month as a continuous housing slump raised concerns about the health of developers with partial state support. The yield premium on GLP China Holdings Ltd.’s notes due in February 2024 has jumped by more than 1,000 basis points.
More stories like this are available on bloomberg.com
©2023 Bloomberg L.P.