International investors have more than doubled their bets against under-pressure developer China Evergrande’s bonds, in a sign of market sentiment souring further on one of Asia’s most prominent dollar borrowers, reported the Financial Times.
The face value of Evergrande bonds that have been lent out to other investors has risen close to $400 million, more than twice what it was at the start of June, according to data from Markit.
Almost $170 million of the company’s $2 billion bond that matures in 2022 is out on loan, up from $50 million at the start of the year. The bond was trading at 57 cents on the dollar on Wednesday, compared with almost par in May.
The data serves as a proxy for bearish bets against Evergrande. Investors short bonds by borrowing and selling them, hoping to buy them back later at a cheaper price and return the bond to its original holder having pocketed a profit.