The yields of lower-rated bonds in China, already at a one-year low, have room to fall further after the government allowed insurers to invest in the securities and eased access to credit, according to Ping An Insurance Group Co.

Policy providers, allowed to buy riskier notes for the first time, are bullish as China cuts interest rates, reducing default risks.

The average yield on the lowest-rated securities dropped to 6.3 percent this month, down 110 basis points since regulators permitted insurers to buy unsecured notes in May.

Previously, they were restricted to corporate debt that was guaranteed by other companies. Globally, the riskiest bonds pay 8 percent, Bank of America Merrill Lynch indexes show.

Agencies - China Daily