(Bloomberg) -- Rising Treasury yields, trade-war concerns and Chinese defaults have wiped out $45 billion since the start of the year in the market value of dollar notes sold by Asian and international borrowers, according to Singapore-based BondEvalue.

“High net-worth investors not only saw great losses in their leveraged positions, but also faced difficulties in selling off bonds to cut their losses,” said the firm, which provides bond services to private banks, in a note released earlier this week.

Recent defaults on dollar securities by Chinese high-yield borrowers such as China Energy Reserve & Chemicals Group Co. and Hsin Chong Group Holdings Ltd. have “rattled investors,” the firm said. Global trade wars have also loomed over Asia’s debt markets, with yield premiums on junk dollar notes near the highest in over two years, according to a Bloomberg Barclays index.

The Chinese government’s crackdown on excess debt has led to a “severe liquidity crunch” especially for high-yield borrowers, according to BondEvalue. One casualty was Wintime Energy Co., which defaulted on its onshore debt last week. Amid volatile markets, liquidity has waned. Investors have been exposed to widening bid-ask spreads for 73 percent of the securities that BondEvalue assessed between Jan. 10 and June 29, it said.

A “staggering” 96.4 percent of the bonds within its coverage have fallen in value during the first half of 2018, the firm said. Outflows from emerging-market notes have also caused spreads to widen significantly, according to BondEvalue.

The firm assessed a list of over 1,600 notes, predominantly Asia dollar securities. It also included bonds that are typically sold to private banking investors, including international sovereign and perpetuals issued by global banks, according to its BondEvalue founder Rahul Banerjee.

To contact the reporter on this story: Denise Wee in Hong Kong at dwee10@bloomberg.net

To contact the editors responsible for this story: Andrew Monahan at amonahan@bloomberg.net, Ken McCallum

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