Western Funds that invested in Evergrande bonds pwned, left 1% value

[mGx-Alander]

https://fortune.com/2024/02/08/evergrande-liquidation-99-percent-haircut-hedge-funds/

What they got instead over the course of the next two years is a harsh lesson in the dangers of trying to bargain with the Communist Party. The talks are now dead — a Hong Kong court has ordered Evergrande's liquidation, and the bonds are nearly worthless, trading in secondary markets at just 1 cent on the dollar.

While global money managers have long known that the Chinese government exerts influence over corporate affairs in ways that are uncommon across the developed world, Evergrande was nonetheless a first-hand education for many of them in just how much authorities will intervene for the sake of political and economic expediency.

The 1-cent-on-the-dollar price on the bonds, they say, sends a warning to investors as other Chinese companies, including Country Garden Holdings Co., follow Evergrande into default amid an economic slump that officials have struggled to fix. And the country's disregard for foreign creditors almost certainly means more of them will get sold for parts.

"Investors probably did not fully appreciate the risk of state intervention," said David Knutson, chair of The Credit Roundtable, an organization of investors that works to respond to corporate actions averse to bondholders. "Apportioning losses between domestic creditors and foreign creditors will be political."


Of course, it's more than just Beijing's involvement that caused Evergrande's bonds to crater.

[darkevil]

Suay haha. Dont dare to touch china stocks