China Junk Bonds Hitting Record Lows as Failures Show Everywhere

Life is becoming even tougher for China’s weakest property developers, as an industry-wide debt crisis continues to fuel payment failures and pushes the nation’s junk dollar bonds toward record lows.

Average prices of high-yield Chinese dollar notes, most of which are issued by real estate firms, fell 0.5 to 1 cent Monday, according to traders. That leaves them set for their lowest-ever level, below a 56.5-cent end-of-day nadir reached in March, according to a Bloomberg index.

“The record low dollar bond price is a reflection of high probability of restructuring or default,” said Carl Wong, a portfolio manager ...