Appendix

China Southbound: The People’s Bank of China and Hong Kong Monetary Authority jointly announced that Southbound Bond Connect will commence on September 24, offering onshore Chinese investors the option to invest in Hong Kong’s bond market. Together with China Foreign Exchange Trade System (National Interbank Funding Center) ("CFETS"), Bloomberg will launch new solutions on September 24, based on the system connectivity between both parties, to facilitate seamless trading on the Southbound Bond Connect. The new solutions will enable offshore dealers to provide market making services for onshore investors. Bloomberg will provide security master data and valuation data for eligible securities and the relevant data will be displayed on the CFETS platform upon launch.

Kungfu Bond: In 2018, following consultation and a survey with over 400 market participants across Asia, Bloomberg unveiled “Kungfu bond” as the industry reference for offshore U.S. dollar bonds issued by Chinese companies and financial institutions.

IG/HY/NR: For offshore bonds, credit rating below BBB- is considered as High Yield, whereas onshore takes rating below AA as High Yield.

Functions quoted in the report:

WCDS: world CDS monitor
DDIS: debt distribution
TAGG: trades aggregate
FIW: fixed income worksheet

Relevant BI reports:

Market's 40% default rate in China junk property may be too high
Kaisa's missed payment may add to China property-bond contagion
After China high-yield downgrades, investment-grade may be near
China developers may use onshore funds to meet offshore debt

Additional charts: Distressed securities

Distress count by security type