Although Evergrande has made its overdue payment, we see some companies issuing their bonds early due to concerns about real estate companies. This can also be read as a kind of credibility load against the lenders; because in this market environment, it seems that companies with sufficient liquidity or cash do not want to be lumped together with others. Early debt payments reveal the desire to create a kind of collateral for future borrowings. On the other hand, yields on junk bonds are increasing. Probably, many real estate companies will prefer to extend and restructure the maturity.
On the other hand, the decrease in the amount of negative yield bonds continues in the Euro Zone. The equation here is a little different: The economic normals are different than before, because there are now concerns about higher inflation and lower growth. The spread between investment-grade bonds and low-credibility bonds is important, because it is also necessary to understand whether the crisis is company-based or macro-scale.
Kaynak Tera Yatırım-Enver Erkan
Hibya Haber Ajansı