PRC corporates struggling to cope with higher borrowing
costs and regulatory curbs on real estate financing have turned
to the offshore debt market for fundraising, but with such an
influx comes with offshore default concerns.
Some market participants are worried about the growing trend
involving red-chip holding companies listed offshore with
assets parked onshore in mainland China, where the parent has
issued a lot of debt offshore. They question whether, in the
case of an offshore default by any of these parent companies,
it may be problematic if and when they seek to channel onshore
funds out of the country to be used to repay offshore debt.
Hong Kong-listed PRC residential developer China Evergrande
Group issued a dual-tranche $1.5 billion US dollar-denominated
high yield bond and a single-tranche $1 billion high-yield
dollar paper within one day of each other in March.
"It remains a big question mark as to...