China's promise of a "comprehensive" package to address local debt issues has triggered a rush into bonds issued by local government financing vehicles (LGFV) as investors sense an implicit state guarantee for these provincial firms. Yields on LGFV bonds, which account for half of China's corporate bond market, have dropped to their lowest levels this year, even as a debt crisis in the property sector that most of them are exposed to deepens. Data from Chinabond, a platform that's part of the China Central Depository and Clearing, shows spreads on one-year AA- rated bonds over comparable government bonds, have dropped from 353 basis points (bps) at the start of the year to around 173 bps, the smallest gap since late 2020.
China s promise
of a comprehensive package to address local debt issues has
triggered a rush into bonds issued by local government financing
vehicles as investors sense an implicit state.
China moves to shut a lifeline for cash-strapped local governments | Hellenic Shipping News Worldwide hellenicshippingnews.com - get the latest breaking news, showbiz & celebrity photos, sport news & rumours, viral videos and top stories from hellenicshippingnews.com Daily Mail and Mail on Sunday newspapers.
Pressure is mounting on China's cash-strapped local governments as authorities move to shut a private funding route for their financing arms, according to planned new rules and people familiar with their aims, raising credit risks and default worries.
Analysis-China Moves to Shut a Lifeline for Cash-Strapped Local Governments usnews.com - get the latest breaking news, showbiz & celebrity photos, sport news & rumours, viral videos and top stories from usnews.com Daily Mail and Mail on Sunday newspapers.