Email of the day on Chinese property developer bonds
Comment of the Day

September 24 2021

Commentary by Eoin Treacy

Email of the day on Chinese property developer bonds

Thank you for another very well video today. I noted your comment about bonds of some Chinese construction companies with attractive yields. Would you consider to share the names of some of the "better" Chinese companies with attractive yields for an international investor? As always thanks a lot for the excellent service you continue to provide.

Eoin Treacy's view

Thank you for question which may be of interest to other subscribers. I posted a number of charts of Chinese property developer bonds in Comment of the Day on September 21st. 

Evergrande missed its coupon payment last night so it now has 30 days to make good on its commitment before an official default is confirmed. The speculation one is making in buying the less affected bonds of other Chinese property developers is that relative strength is indicative of somewhat better financial or market conditions for these borrowers.  Importantly, while the trends in their yields are accelerating there is no sign yet that a peak is in. High yield tends to trade like equity and that also implies low recovery rates in the event of a default.

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