High-yield dollar bond issuance by Chinese developers during the year to date is down a record 97 per cent compared with the first quarter of 2021, according toBankers and fund managers say Evergrande’s default late last year spurred concerns over a lack of disclosure as international investors struggle to assess the company’s hidden debts.So far, just two deals worth less than $US295 million in total have gone through, compared with more than $US8.
“There’s hardly any [deals] being done,” said the head of China debt capital markets at one international bank, who added that even larger, more robust developers were beginning to feel pressure from the lack of ready access to global capital markets. “All of them have some debt maturing … we’re definitely not out of it yet.”The average yield on a Bank of America index tracking Chinese high-yield bonds jumped to 32.
Bankers and fund managers say Evergrande’s default late last year spurred concerns over a lack of disclosure as international investors struggle to assess the company’s hidden debts. “It’s down to trust,” the debt capital markets banker said, adding that the second quarter would see little or no issuance if doubts about developers’ books persisted. “Because if I cannot trust your financials, what do I have?”
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