A record 85% of all Chinese bond defaults this year have happened on offshore payments, while onshore defaults are at the lowest since 2018, as per Bloomberg, citing its data series. Chinese firms have missed payments on $26.2bn of offshore bonds in year-to-date, with real estate developers contributing to almost all of the defaults. However, defaults on issuers’ onshore bonds have dropped over 75% to RMB 31.2bn ($4.6bn) this year. Bloomberg cites China’s monetary easing, calls for firms to pay their debts and contractual modifications like maturity extensions as reasons that have eased defaults in local bonds. With another $31bn in dollar bonds maturing by end-2022, analysts continue to expect the offshore-onshore divergence to continue.
China Offshore Defaults at Record While Onshore Delinquencies Drop
by Amruth Sundarkumar | Jul 14, 2022 | China, Distressed / Defaulted Bonds, High Yield Bonds