(Reuters) Spreads on China’s high-yield debt MERACYC dominated by property developers narrowed on Tuesday from its record levels last week as Beijing said sector risks were controllable.
China’s officials reassured markets that property sector risks and credit tightening by its financial institutions were addressed.
Yu Huiman, the chairman of China’s security regulator, says Beijing will address potential defaults in the bond market and improve the effectiveness of debt financing.
Chinese officials also reassured markets that it would protect the legal rights of all creditors and asset owners of the embattled Evergrande Group. The state also seeks to address potential spillover of the Evergrande risks to the broader financial and property sector.
The comments by Chinese authorities come as Evergrande paid its onshore coupon due on Tuesday. The company could still default on a coupon payment due on September 23 upon an expiry of a 30-day grace period.
Investors are still warning that the market is still shaky and sensitive, with bonds of Kaisa Group Holdings continuing to fall.
CSI 300 is down -0.25%, Hang Seng Index is up +1.35%, USDCNY is up +0.15%.
