China high-yield deals pulled

Baoxin and Zhengtong failures dash hopes of high-yield bond revival

High-yield bonds for Baoxin Auto and China Zhengtong Auto are postponed as markets stall amid Greek woes, widening spreads and fears of a hard landing in China.
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A China Zhengtong Auto dealership
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<div style="text-align: left;"> A China Zhengtong Auto dealership </div>

Baoxin Auto and China Zhengtong Auto postponed their debut in the dollar bond market on Wednesday a move that came as little surprise to bankers who had speculated that both deals would be pulled after they failed to price last week. Both companies cited the unfavourable market conditions as reasons for their postponement in statements posted to Hong Kong’s stock exchange.

Their failure to close douses hopes of a revival of China’s high-yield market. So far this year, only a handful of Chinese issuers, such as China Shanshui Cement, Agile Property and KWG Property, have priced high-yield bonds. Given the sell-off in the market, few issuers are expected to launch...

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