Morgan Stanley: Beware of China High Yield Debt, As Lower Leverage Is Double-Edged Sword

With deleveraging and capital controls haunting investors, credit risk is back in focus on the Chinese onshore market. Morgan Stanley’s Kelvin Pang, in a January 18 Asian Credit Strategy note, recommends that investors switch out of the China high yield bond market and rotate into investment grade bonds in the region “before the repricing of the credit risk premium in offshore credit.”

China Debt Default Looms As Growth Options Run Out ..

China's $34 Trillion Experiment Is Blowing Up - Kyle Bass

Reducing corporate leverage is a double-edged sword

The deleveraging of China’s onshore bond market, which has raised concerns over the past year, is “finally” occurring among...