China’s Riskier Junk Dollar Bonds Are Losing Investors Money

July 30, 2021, 3:38 AM

China’s riskier dollar bonds once beloved by global investors for their juicy yields are now dragging down returns.

Single B rated bonds have lost 17.5% so far this year, spurring a 7.3% retreat among the broader universe of junk notes, according to a Bloomberg Barclays index of China’s high-yield dollar debt as of Thursday. That debt makes up 20% of the index, the single-largest weighting by credit quality. By contrast, B-rated notes returned 10.7% in 2020.

A clampdown on the debt-laden property industry and a liquidity crunch at China Evergrande Group, Asia’s biggest issuer of high-yield debt, is pressuring ...

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