Asian junk bond investors are increasingly looking to smaller pockets of the market as a debt crisis among the biggest issuers, Chinese property developers, forces old playbooks to be rewritten.
Chinese real estate notes had long been one of the world’s most-profitable trades. But a record string of defaults has ruined appetite and caused the nation’s junk notes to tumble almost 27% in 2022. Meanwhile, a worldwide debt rout has created a game of losing less. Money managers point to high-yield securities from India and Southeast Asia as alternatives in this new era.