China Junk Bond Premiums Gap Most in Two Months Amid Stock Rout
This article is for subscribers only.
The extra yield investors demand to hold junk debt in China widened the most in two months as the government’s failure to avert a stock slump damped demand for risky assets.
The gap between five-year top-rated and AA- rated corporate bond yields increased seven basis points Wednesday to 142.25, matching the steepest climb since May 15, ChinaBond data show. Notes rated AA- or below are considered junk in China’s onshore market. The Shanghai Composite Index has tumbled more than 30 percent from its June 12 peak as traders unwind margin bets.