Huarong, Evergrande bond slump tests too-big-to-fail belief

Hong Kong

A BOND selloff in two of China's most prolific debt issuers is widening concern over contagion risks in the country's US$862 billion dollar bond market.

Bonds of China Evergrande Group, Asia's largest seller of junk-rated dollar debt, have slumped in recent weeks amid a barrage of negative news. That's added to the sense of unease created by China Huarong Asset Management Co, one of the biggest issuers of investment-grade securities, as the company's failure to release financial results sparked speculation about a potential debt restructuring. Both firms have about US$21 billion of dollar bonds.