The global financial crisis of 2008 meant investors paid particular attention to the likely default of a high-risk asset – the housing investment firm Lehman Brothers Holdings, which failed after collateral assets fell in value.

But with Evergrande Property, China’s biggest listed property developer, racing towards what many analysts regard as a “Lehman Moment”, few top US investors seem to have been affected by the prospect of large investments in China falling through.

Investors in South Korea and Japan have been concerned about their stakes in Evergrande, following similar defaults at local firms in those countries. But even as it looked like Evergrande was facing a debt deadline, few top U.S. funds have yet indicated that they would sell shares in the Chinese firm, according to a Reuters survey.

The reluctance of U.S. investors to sell shares of Evergrande is a sign of how the crises in the high-yield emerging market credit markets have not had an effect on Chinese property stocks. Yet while Evergrande’s shares have risen slightly in the past week, it remains nearly 70% below their highs just before it issued bonds in 2014.

China’s stock market has slumped into a fresh bear market, closing at a six-year low on Thursday, as borrowers increasingly default on their debts. [link.reuters.com/wuq96w]

“A Lehman Moment is probably around the corner,” said Alistair Chan, a Hong Kong-based analyst at Mirae Asset Securities. “If we go down to 4,000 (on the Shanghai Composite Index) or lower I would think US investors would get involved and start to panic and start pulling money out of Chinese companies.”

While firms including Evergrande have raised billions of dollars through debt in recent years, debts have come to carry little or no debt covenants.

Investors’ confidence in Chinese financial markets has been shaken by the corruption scandal surrounding China’s top securities regulator, the arrest of a top executive at Evergrande and the government’s efforts to dramatically cool the housing market. [link.reuters.com/qeq96w]

By contrast, Evergrande, which is controlled by China’s richest man, Li Ka-shing, sold new shares to shore up its finances. The deal would “massively boost” its profits when it was completed in June, the company said in a filing to the Shanghai stock exchange in May.

“Evergrande has upped the ante by selling new shares to raise cash,” said Chan. “But they don’t have any debt covenants and if they default on debt, they can simply pay off the bond holders and the debts will be wiped out.”

Evergrande did not reply to requests for comment.

U.S. Fund Manager Eye on Evergrande

U.S. hedge fund Polygon Global Partners sold about three percent of its stake in Evergrande in the third quarter of 2015, according to regulatory filings, while Ohio-based big fund Elliott Management sold about 6.8 percent last year.

Only the Asia Pacific Advisors Fund, a closely-held hedge fund, held a stake that exceeded 3 percent last year, according to regulatory filings, while the Value Advisors Fund held a stake of less than 2 percent.

Elliott, Polygon and Value Advisors declined to comment.

Three other top-10 hedge funds that invest in China-listed firms, which were not named in the Reuters survey, invested less than 1 percent of their portfolios in Evergrande in 2015, with one fund holding less than 1 percent, the Reuters survey showed. [link.reuters.com/hag95w]

Furthermore, none of the funds had a debt position of more than 1 percent, the survey showed.

U.S. funds have a large portfolio in Chinese securities, but they have never held more than 2.5 percent of the total, according to the Investment Company Institute, a trade group for U.S. mutual funds.