Breaking News
LAST CHANCE for Cyber Monday SALE: Up to 54% off InvestingPro! Register here
Investing Pro 0
Ad-Free Version. Upgrade your Investing.com experience. Save up to 40% More details

China Begins Dollar Bond Sale Even as Evergrande Woes Fester

ForexOct 18, 2021 23:54
Saved. See Saved Items.
This article has already been saved in your Saved Items
 
2/2 © Bloomberg. A U.S. one-hundred dollar banknote and a Chinese one-hundred yuan banknote are arranged for a photograph in Hong Kong, China, on Monday, April 15, 2019. China's holdings of Treasury securities rose for a third month as the Asian nation took on more U.S. government debt amid the trade war between the world’s two biggest economies. Photographer: Paul Yeung/Bloomberg 2/2

(Bloomberg) -- China is marketing a dollar bond sale in Hong Kong for the fifth straight year, even as strains emerge in the credit market amid deepening concerns over the financial health of the country’s property developers. 

The Ministry of Finance said Sept. 30 it would sell a combined $4 billion of dollar bonds through a 4-tranche deal, less than last year’s $6 billion sale. A person familiar with the matter said Tuesday that initial price guidance is as follows, with premiums over Treasuries lower than the initial indications on last year’s deal: 

The debt offering will be a test of investor sentiment at a time when China-specific risks have flared. A regulatory clampdown on the nation’s real estate sector and a debt crisis at major developer China Evergrande Group future have sent shock waves through the country’s credit markets. 

Yields on dollar junk bonds recently soared to their highest in a decade at 20%, according to a Bloomberg index, as investors price in increasing default risk for some Chinese borrowers. Still, demand has historically been strong for China’s sovereign debt offerings, which carry investment-grade ratings. And a flood of cash from central banks since the pandemic has cut financing costs for many borrowers around the world.  

China made a comeback to the dollar bond market in 2017 after a 13-year hiatus. It’s since been an annual visitor and met with strong demand. It sold a combined $17 billion of the debt through 2020, as well as 8 billion euros ($9.3 billion) of bonds in that currency since 2019.

This year’s sale continues its reach to institutional U.S. investors. The Ministry of Finance broadened the breadth of potential buyers last year with China’s debut issuance of so-called 144A notes.

There was no immediate reply from the ministry to a fax from Bloomberg News seeking comments on the bond offering.

(Adds background throughout)

©2021 Bloomberg L.P.

China Begins Dollar Bond Sale Even as Evergrande Woes Fester
 

Related Articles

U.S. Dollar Rebounds; Traders Reassess Omicron Risks
U.S. Dollar Rebounds; Traders Reassess Omicron Risks By Investing.com - Nov 29, 2021

By Peter Nurse Investing.com - The dollar traded higher Monday, boosted by higher U.S. Treasury yields as traders considered Friday’s sharp moves on the discovery of the omicron...

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind: 

  • Enrich the conversation
  • Stay focused and on track. Only post material that’s relevant to the topic being discussed.
  • Be respectful. Even negative opinions can be framed positively and diplomatically.
  •  Use standard writing style. Include punctuation and upper and lower cases.
  • NOTE: Spam and/or promotional messages and links within a comment will be removed
  • Avoid profanity, slander or personal attacks directed at an author or another user.
  • Don’t Monopolize the Conversation. We appreciate passion and conviction, but we also believe strongly in giving everyone a chance to air their thoughts. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.

Write your thoughts here
 
Are you sure you want to delete this chart?
 
Post
Post also to:
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
 
Are you sure you want to delete this chart?
 
Post
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's Investing.com's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.
Continue with Google
or
Sign up with Email