Chinese Junk Bonds Are Rising From the Ashes of Property Crisis

Risky debt from China is back in favor, just so long as it’s not from property developers.

China Hongqiao Group Ltd., the country’s largest private aluminum producer, priced $330 million of notes at 7.05% on Monday. They were 10 times oversubscribed with more than $3.9 billion of bids and the pricing was 45 basis points tighter than initial guidance, in signs of strong demand.

The deal underscores one of the most dramatic recent shifts in financial markets globally, after an unprecedented real estate crisis destroyed about $142 billion of market value in dollar junk debt from a peak in ...