Investment Grade Trades Like Junk in China as Investors Balk

The video discusses the stress in the Chinese bond market, highlighting the impact of the government's deleveraging campaign, which has increased yields and affected both high yield and investment grade bonds. Investors are increasingly conducting their own credit analysis due to distrust in local rating agencies. The People's Bank of China aims to improve the credibility of the local credit rating industry, but specific steps have not been outlined. The outlook for downgrades and defaults remains strong, with a significant portion of the market still rated as investment grade despite rising yields.

What is the significance of the yield on investment grade bonds being above 10%?

What factors are contributing to the stress in the Chinese bond market?

How has the deleveraging campaign by the government affected companies in the bond market?

What challenges do investors face in the current bond market environment?

What steps has the PBOC indicated they would like to take regarding the credit rating industry?