Deutsche Bank Sees ‘Distressed Debt Cycle' Starting in China
Added 01-17-20 02:04:03am EST - “(Bloomberg) -- Sign up for Next China, a weekly email on where the nation stands now and where it's going next.Amid rising defaults and tighter liquidity for Chinese privately-owned enterprises, the nation's banks are letting some…” - Finance.yahoo.com
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(Bloomberg) -- Sign up for Next China, a weekly email on where the nation stands now and where it's going next.
Amid rising defaults and tighter liquidity for Chinese privately-owned enterprises, the nation’s banks are letting some companies fail, something Deutsche Bank AG says presents bigger opportunities for foreign investors in troubled debt.
The German lender is an active distressed player in Asia Pacific and has bet on some of the biggest restructuring in the region, including commodities trader Noble Group Ltd. China is taking steps to allow more foreign investment into the country’s 2.37 trillion yuan ($344 billion) non-performing loan market. It will give U.S. investors direct access to the nation’s soured debt market as part of its trade deal.
“There are signs we are seeing the beginning of a distressed debt cycle in China,” said Amit Khattar, co-head of investment bank for Asia Pacific, in an interview. “Distressed debt in China is going to be really interesting.”
Defaults in China’s onshore corporate bond market hit a record in 2019 and troubles have continued in the offshore market as well this year. China state-backed Qinghai Provincial Investment Group Co. missed a coupon payment on a dollar bond due last week and there have been jitters over luxury clothing giant Shandong Ruyi Technology Group Co., whose unit missed payment on a loan facility last year.
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