LONDON/HONG KONG—With China Evergrande Group’s default deadline drawing closer, offshore bond investors in the property developer are pondering their legal options to safeguard their investments. Below are some factors at play as offshore investors, with some $20 billion of Evergrande debt outstanding, gear up to deal with the potential fallout from what could become China’s biggest ever corporate default: Do Evergrande’s Offshore Bonds Carry Any Guarantee From Issuer? Chinese legal rules prevent mainland-incorporated parent companies from guaranteeing their subsidiaries’ offshore debt without going through a registration and approval process. To work around this, offshore corporate bonds, in many cases, are issued by Special Purpose Vehicles (SPVs) and feature a so-called keepwell structure. The way many market participants worked around the lack of a guarantee was by using keepwell deeds – an undertaking to bondholders, and the offshore SPV which issues the debt, that the parent will make sure the SPV …