SOVEREIGN DEBT RESTRUCTURING | MASTERCLASS

A deep dive masterclass on sovereign debt restructuring, to be conducted virtually by Asian high yield bond expert Florian Schmidt.

30 June 2022 (Thu), 5pm Singapore/HK time

China Huarong’s dollar bonds filled the losers list on Wednesday with pressure now seen in the onshore market. Onshore trading of Huarong’s bonds has seen liquidity dry up with Bloomberg reporting sources talking about wide bid-offer spreads and low deal volume. The majority of offers (sell quotes) for Huarong’s bonds ranged from CNY 70-80 in recent weeks, said two of the people and one high-yield fund manager in Shanghai saying that he has been posting bids (buy quotes) at CNY 50 since mid-May but hasn’t received any prices in this range. This wide bid-offer spread indicates high risk in executing trades, especially exiting large positions. Traders said there were no bids at all for Huarong onshore bonds on Tuesday, as of 11am local time.

Huarong’s dollar bonds recently saw a recovery after sources reported that Beijing was nudging them to sell non-core assets while considering an implicit guarantee of their liabilities. However, their dollar bonds again moved lower 2%-3.5% yesterday and continue to move lower today. Its 5.5% 2025s is down over 3.5% to 74, yielding 15.2% and its 2.875% Perps fell 2 points to 80.2.

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