Evergrande Sends Even Safer Bonds Into Worst Slump Since April

Contagion from China Evergrande Group has started to engulf even safer debt in Asia, sparking the worst sustained selloff of the securities since April.

Premiums on Asian investment-grade dollar bonds widened 2-3 basis points Tuesday, according to credit traders. That’s after a jump of 3.4 basis points on Monday, and means spreads are heading for the biggest two-day increase in five months.

Fears about the potential impact from a default by Evergrande, which is sitting on more than $300 billion of liabilities, have shot through global financial markets. The company is unlikely to get direct government support and is on ...