BRIEF-Moody's Says Evergrande's Lax Covenants Worsen Offshore Bondholders' Woes

BY Reuters | CORPORATE | 01/25/22 10:54 PM EST

Jan 25 (Reuters) -

* MOODY'S -- EVERGRANDE'S LAX COVENANTS WORSEN OFFSHORE BONDHOLDERS' WOES

* MOODY'S- COVENANT PROTECTIONS OF EVERGRANDE'S BONDS AGAINST KNOWN STRUCTURAL SUBORDINATION RISK HAVE LOOSENED OR BEEN ELIMINATED TO THE DETRIMENT OF OFFSHORE BONDHOLDERS

* MOODY'S SAYS EVERGRANDE'S WEAKENED COVENANTS HAVE ENDANGERED DEBT SERVICING AND FURTHER SUBORDINATED OFFSHORE BONDS Further company coverage:

In general the bond market is volatile, and fixed income securities carry interest rate risk. (As interest rates rise, bond prices usually fall, and vice versa. This effect is usually more pronounced for longer-term securities.) Fixed income securities also carry inflation risk and credit and default risks for both issuers and counterparties. Unlike individual bonds, most bond funds do not have a maturity date, so avoiding losses caused by price volatility by holding them until maturity is not possible.

Lower-quality debt securities generally offer higher yields, but also involve greater risk of default or price changes due to potential changes in the credit quality of the issuer. Any fixed income security sold or redeemed prior to maturity may be subject to loss.

Before investing, consider the funds' investment objectives, risks, charges, and expenses. Contact Fidelity for a prospectus or, if available, a summary prospectus containing this information. Read it carefully.

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