The newfound stability in Chinese dollar bonds will be tested this week as Kaisa Group Holdings Ltd., one of the market's largest issuers, announces whether creditors will swap $400 million of dollar notes in a move designed to avert default.
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London-listed asset manager Ashmore Group bought almost $100 million of bonds issued by China Evergrande Group or its subsidiaries, bringing its holdings of debt to more than $500 million at the end of September, as other investors were heading for the exit. Evergrande rose by 1.3% as of 11:43 a.m. in Hong Kong after plunging 8.8% on Monday.
After Rocky Month, none of the Chinese Bond traders are concerned with none of Kaisa.
None Ashmore Doubled Down on Evergrande as Others Fled for the Exits.
Goldman Sachs believes that China's high-yield property sector could outperform other segments of Asia's credit market next year, but warns investors that credit stress is unlikely to subside. In a note dated Friday, Kenneth Ho wrote that we prefer to stay neutral across IG and HY, and focus on relative value.
Credit traders believe that the notes on track for the first gain in more than a week have increased by 1 cent on the dollar as a result of China Dollar Junk bonds' first gain in more than a week, according to a Bloomberg index. Asian investment-grade dollar bond spreads tightened at least 2 basis points, set for the biggest improvement in a week in about a week.
One of the market's largest issuers has announced this week that Kaisa will be the next worry for China Bond Traders after Rocky Month 5 a.m. HK The newfound stability in Chinese dollar bonds will be tested this week, as one of the market's largest issuers announces whether or not they will participate in a debt swap designed to avert default.
Kaisa Group Holdings Ltd. s offer to exchange $400 million of dollar notes maturing December 7 for new ones due to 18 months later expires on Thursday at 4 p.m. in London. If the offer - which requires a 95% approval rate fails to win support, the struggling firm has said it may not be able to repay bonds and may consider a debt restructuring.
Ashmore Doubled Down on Evergrande as others fled for the Exits 10: 13 p.m. HK China Evergrande buckling under its massive debt load and investors heading for the door looked like a buying opportunity for the asset manager Ashmore Group.
From July to September, Ashmore bought more than $100 million of bonds issued by Evergrande or its subsidiaries. According to Bloomberg, the debt's holdings increased to more than $500 million at the end of September. The total level held by Ashmore may be higher since 75% of its assets are held in segregated mandates, for which data may not be available.
According to a Hong Kong stock exchange filing, Ronshine China has put $140 million into a designated bond-repayment account of Citicorp International for the payment of outstanding senior notes due Friday.
The dollar bond has an outstanding amount of $136.6 million, plus $3.58 million in interest.
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