Some of the world’s biggest money managers increased bets on Dalian Wanda Group Co. dollar bonds while worries about the Chinese conglomerate’s finances sent notes into distress.
(Bloomberg) — Some of the world’s biggest money managers increased bets on Dalian Wanda Group Co. dollar bonds while worries about the Chinese conglomerate’s finances sent notes into distress.
Institutional investors that publicly file their holdings have increased their positions in Wanda units’ offshore bonds by a combined $263 million since March 3, roughly when the selloff began, according to a Bloomberg Intelligence analysis. The holdings figures are based on the par value of the notes, and most of the increase by the institutions occurred by early May.
Deutsche Bank AG has become the largest institutional holder of Wanda dollar bonds among those that make public disclosures. According to the BI analysis of holdings figures based on par value of the securities — which would differ from market prices and so would be a higher figure than the actual money invested when purchased — Deutsche Bank’s positioning has jumped to $62.7 million from $6 million in early March.
Fidelity International Ltd.’s holdings have climbed from zero to $43 million, while they’ve nearly doubled at Lombard Odier to $60.6 million.
Spokespeople at Deutsche Bank’s asset-management unit and Fidelity International declined to comment on individual holdings or companies. A spokesperson at Lombard Odier said it had no comment. The reasons behind the purchases couldn’t be determined from the filings.
The firms boosted positions in Wanda dollar notes despite liquidity concerns, which include a unit still not being listed in Hong Kong and a planned downsizing at the conglomerate. In recent weeks, gains in China’s property-dominated high-yield market have signaled bargain-hunting amid hopes of stronger policy support for the slumping housing market.
The Wanda bonds may have attracted buyers because the group still has “relatively strong fundamentals despite its very tight liquidity as the IPO is stuck in limbo,” said Bloomberg Intelligence credit analyst Andrew Chan.
Once a success story for shedding debt, Wanda is controlled by billionaire Wang Jianlin and with business spanning from hotels to theme parks and cinemas.
But troubles mushroomed in April as the shopping-mall unit’s latest listing application lapsed.
Two notes sold by a separate unit, among the few high-yield dollar bonds from a Chinese issuer this year, by late May had plunged to deeply distressed levels at under 35 cents. Following a brief rebound, the group’s notes starting falling again last week after a Shanghai court froze a 1.98 billion yuan ($277 million) stake in Wanda’s key commercial-property manager.
–With assistance from Franco Li.
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