China Tech Sector’s Dollar-Bond Sell-Off Attracts Bargain Hunters
(Bloomberg) — The regulatory headwinds and economic uncertainties weighing on China’s technology stocks have also hit the sector’s dollar bonds, a selloff that has some credit investors upbeat on future performance.
The notes’ spreads have started widening again after March’s swing, leaving them very high and attractive given many tech companies are cash-rich and lightly leveraged, said Jean-Louis Nakamura, Asia Pacific chief investment officer at Lombard Odier. The firms’ debt-repayment abilities haven’t been affected by the regulatory concerns, which “are mostly a problem for equity owners,” according to Phillip Torres, global co-head of emerging market debt at Aegon Asset Management in Chicago.
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