Wanda bonds hit more in China than overseas
SHANGHAI: Dalian Wanda Commercial Properties Co’s onshore bondholders appear more anxious about the developer’s future than their offshore counterparts, debt prices suggest, highlighting investors’ uncertainty about how Chinese authorities will deal with the company.
The interest-rate gap between the two type of notes has widened recently, with the developer’s onshore debt yielding more than 3.5 percentage points higher than offshore bonds of similar maturity.
That compared with the average difference of about 1.9 percentage points for this year, Chinabond and Bloomberg-compiled data show.
Dalian Wanda Group Co – the parent of the property subsidiary –is among firms including Anbang Insurance Group Co, Fosun International Ltd and HNA Group Co that have faced increased scrutiny from the Chinese government on their overseas investments, as authorities try to slow capital outflows to prevent the yuan from weakening.
Analysts are also split on their outlook for the property company’s offshore bonds, with BNP Paribas SA saying investors should exit them, Nomura Holdings Inc recommending staying underweight and JPMorgan Chase & Co recommending being overweight on the debt.
“It appears onshore and offshore may have a different sense as to political risk, especially when it comes to rumours. It is hard to say if onshore investors are being irrationally pessimistic or whether the offshore investors are underestimating the risk given the lack of clarity on the situation,” said Chuanyi Zhou, a credit analyst in Singapore at Lucror Analytics.