|Bid||2.990 x 0|
|Ask||3.020 x 0|
|Day's Range||2.990 - 3.050|
|52 Week Range||1.920 - 3.240|
|Beta (3Y Monthly)||0.15|
|PE Ratio (TTM)||N/A|
|Earnings Date||Mar 28, 2019|
|Forward Dividend & Yield||N/A (N/A)|
|1y Target Est||3.30|
(Bloomberg) -- Rating companies are turning more downbeat on Chinese junk bonds. Investors can’t get enough of the debt.The three main international credit rating companies have issued 84 downgrades on the nation’s riskiest bonds and 33 upgrades, according to data compiled by Bloomberg. The ratio is the highest since 2016. At the same time, a gauge of Chinese junk bond yields offshore is trading near a 14-month low, sending investors in search of higher returns among lower-rated debt.Downgrades haven’t dent investor appetite for high-yield bonds. Red Star Macalline Group Corp.’s dollar bond rose after S&P Global Ratings downgraded it to BB in April. The ratings company cited a “persistently high amount of short-term maturities” at the decorating and Internet retailer.Investors were equally unbowed when China Logistics Property Holdings Co.’s dollar note was cut one notch to B- in May by Fitch Ratings, which cited potential refinancing risks.While a near-record volume of defaults in China’s onshore market have capped risk-taking there, the offshore market has seen fewer missed payments and the U.S. Federal Reserve’s three rate cuts this year have fueled investor demand for yield.China’s private sector has come under pressure as the economy slows, with the nation’s central bank providing only limited easing. Access by such firms to the banking sector remains limited as lenders focus more on politically influential state-owned enterprises.“Given monetary support would stay in a targeted manner, smaller private firms might see greater refinancing pressure and certain highly leveraged names could face some level of difficulty in refinancing their debt onshore,” said Alfred Mui, head of Asian credit at HSBC Global Asset Management. He said smaller companies are likely to face more downgrades due to idiosyncratic risks, while major property firms and SOEs are benefiting from better onshore funding.Returns on single-B rated Asian dollar bonds in October, which are classified at least four steps below investment grade, surpassed those of their relatively better rated BB peers for the first time in three months, according to a Bloomberg Barclays Index.Barclays Plc said in a note this week it sees downgrade pressure continuing next year in Asia driven by rapid growth in the region’s high-yield bond market, especially in notes rated B- or lower as well as by unlisted companies.\--With assistance from Ling Zeng, Xize Kang and Rimi Yoneya.To contact the reporters on this story: Rebecca Choong Wilkins in Hong Kong at email@example.com;Annie Lee in Hong Kong at firstname.lastname@example.orgTo contact the editors responsible for this story: Neha D'silva at email@example.com, Chan Tien HinFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
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