Secret China Distressed-Debt Deals Start Unfreezing Trading
- Central bank arm oversees auction after record run of defaults
- Resolution of bankrupt companies still ‘big unknown’ for some
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After record defaults on China’s bonds, there’s now record interest in trading the country’s distressed debt.
An arm of the central bank that runs the biggest bond-trading platform last month conducted the third auction of distressed securities since July. This one had the biggest participation yet, spanning 43 institutions. While prices of the trades were published by the China Foreign Exchange Trade System, the counterparties’ names were kept secret to maximize deals.