Traders Seize on China Power Firm’s Possible Dollar-Bond Misstep

Traders have seized on a bond-market technicality in an attempt to more than double the yield on a dollar note issued by one of China’s biggest energy infrastructure firms.

The trade hinges on whether Power Construction Corp. of China missed a deadline to deliver a dollar-bond redemption notice to its trustee when the company filed it with the Hong Kong stock exchange on March 3. If it did, the coupon on the bond could jump to more than 8% from 3.08% as a clause in the prospectus is triggered.