High-yield bonds from Chinese issuers received a mixed reception last week when KWG Property and China Oriental, a steel manufacturing company, both came to market. Despite the bonds pricing within 12 hours of each other, the outcome differed significantly both in terms of demand for the new issues and aftermarket performance.
Muted interest for KWG's $250 million seven-year deal confirmed that the market is beginning to wane for property credits and the bonds struggled to perform. Meanwhile, China Oriental benefitted from the fact that it is not a property company and its $550 million five-year deal ended four times covered and traded up in the secondary market.
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