Chinese Developer Bonds Diverge as Offshore Creditors Lose Most

(Bloomberg) — Bonds from China’s distressed developers are suffering some of their worst losses ever offshore, in contrast with relative calm in the local market where investors have had better luck getting repaid.

Examples of the divergence abound. Dollar notes of builders including Yuzhou Group Holdings Co. Ltd. and Shimao Group Holdings Ltd. have plunged, even as yuan bonds have fallen less or gained. Onshore holders have received coupon payments or sweetened offers on extension proposals while offshore payments go missed. A case also emerged recently that flagged risks whether money owed in a restructuring would be able to leave the country.