Junk Dim Sum Added by UOB as Pimco Wary of Rally: China Credit
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A junk Dim Sum bond rally that drove yields to an 18-month low is prompting caution among funds with UOB Asset Management Ltd. preferring shorter-dated notes and Pacific Investment Management Co. wary of high debt loads.
The average yield on these yuan-denominated securities touched 4.95 percent yesterday, the least since September 2011, according to an index compiled by HSBC Holdings Plc. That’s 162 basis points, or 1.62 percentage points, more than investment-grade notes, the smallest spread since February 2011. Speculative-grade debt yields 5.93 percent in the U.S. and 6.61 percent in Asia, Bank of America Merrill Lynch indexes show.