PBOC Makes China Junk Bonds More Resilient Than U.S. Peers
- China's central bank has room for more easing: China Merchants
- Average yields on onshore AA- notes have dropped to 6-year low
Chinese junk bonds are getting some help from the nation’s central bank, making them more resilient if not immune to the global swoon in the riskiest debt ahead of the Federal Reserve’s interest rate decision.
While the average yield on Chinese firms’ speculative-grade notes in dollars has risen 30 basis points in the past 30 days to a two-month high of 8.84 percent, that’s less than the 79 basis point jump in similarly rated securities in the U.S. to 8.97 percent, according to Bank of America Merrill Lynch indexes. In China’s onshore market, the yield on five-year securities with local ratings of AA-, considered junk in the nation, has dropped 20 basis points in the period to a more than six-year low of 4.67 percent, according to ChinaBond data.