Yuan Hurts Junk Bonds of China’s Builders With Most Dollar Debt
ByInvestors sold bonds of China’s junk-rated developers with the most offshore debt after authorities devalued the yuan a second day.
Country Garden Holdings Co.’s 2020 notes slid 0.6 cents on the dollar to 104 cents as of 10:46 a.m. in Hong Kong, the sharpest descent in two weeks. Evergrande Real Estate Group Ltd.’s 2018 securities fell 0.4 cents to 95.3 cents in the first decline in a week. The drops come as the yuan headed for its biggest two-day tumble in 21 years after the central bank cut the reference rate to the weakest since 2012.
China’s builders with non-investment grade ratings have $28.6 billion of outstanding dollar-denominated bonds, meaning that the combined 3.5 percent devaluation in the yuan this week threatens to add $1 billion to their debt servicing costs. That adds to stress as the industry grapples with excess inventory, following the first default on dollar notes by a Chinese builder when Kaisa Group Holdings Ltd. missed a payment in April…
Yuan Hurts Junk Bonds of China’s Builders With Most Dollar Debt
