Record Chinese Bond Defaults Have Investors Fleeing for Safety
(Bloomberg) -- Record Chinese bond defaults and slower economic growth have sent investors scurrying to the relative safety of corporate debt with high credit ratings, and bonds sold by the central government and local authorities, according to data compiled by Bloomberg. Junk notes, many of which are sold by the kind of smaller private companies that officials vowed to support, are falling out of favor. As a result the yield spread between five-year AAA and AA- corporate notes, deemed as junk in China, is hovering near its widest since March 2012.
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