China’s Credit Yields Drop to Record Lows on Bond Bull Run
- Corporate bonds are highly sought after amid a bond rally
- Firms rush to sell longer-duration notes to lock in low costs
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China’s local credit yields have fallen to the lowest level ever as investors load up on corporate bonds to boost returns in a financial system awash in liquidity.
The average yield of China’s onshore three-year AAA rated corporate notes has dropped 26 basis points this month to a record low of 2.25%, according to a ChinaBond index. Those of longer tenors, including 10-year and 20-year notes, are following the same trend.