“When you see these bonds now trading below 10 cents on the dollar, it tells you that investors expect a very low recovery, or total liquidation in some cases.'
“The market is showing all the signs that it’s lost patience,' said Jean-Charles Sambor, head of emerging markets fixed income at BNP Asset Management. Most dollar bonds sold by Chinese property companies are trading below 10 cents on the dollar, and several are trading at less than 5 cents, according to research firm CreditSights. China Aoyuan still hasn’t completed a deal more than 18 months after it defaulted. Last month, Evergrande abandoned a $35 billion debt restructuring plan that it had finally agreed with some of its investors after protracted negotiations. But the distressed-debt playbook isn’t working in China.ĭozens of Chinese property companies have defaulted on their bonds over the last two years, but only a handful have paid investors back any money.
