China downgrade does little to sour bonds

Offshore bonds largely defy a one-notch Moody's downgrade of the sovereign, with secondary prices moving out only by a few basis points — and at least one issuer braving the primary market.

When a rating agency downgrades a major economy, it is supposed to be big news. But after Moody’s cut its rating on China from Aa3 to A1 on Tuesday, debt investors largely shrugged.

Chinese credit default swaps moved only a few basis points, new issues were not much worse, and a few hours after the downgrade, China National Chemical Corp started taking orders for a new dollar bond. Why did the news not have a bigger impact

In part, it is because Moody’s has long flirted with downgrading the country. The rating agency put China on negative rating outlook last March, and has been mulling...

¬ Haymarket Media Limited. All rights reserved.

FinanceAsia has updated its subscription model.

Registered readers now have the opportunity to read 5 articles from our award-winning website for free.

To obtain unlimited access to our award-winning exclusive news and analysis, we offer subscription packages, including single user, team (2-10 users), or office-wide licences.

To help you and your colleagues access our proprietary content, please contact us at subscriptions@financeasia.com, or +(852) 2122 5222

Article limit is reached.

Hello! You have used up all of your free articles on FinanceAsia.

To obtain unlimited access to our award-winning exclusive news and analysis, we offer subscription packages, including single user, team (2-10 users), or office-wide licences. To help you and your colleagues access our proprietary content, please contact us at subscriptions@financeasia.com, or +(852) 2122 5222