Moody’s Sees Defaults as PBOC Warns on Local Risks
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Moody’s Investors Service said China’s local-government financing vehicles face greater risk of default, as regulators warn 20 percent of their loans are risky.
A rally in LGFV bonds may reverse, particularly should delinquencies emerge, Christine Kuo, a Moody’s analyst, wrote in an e-mailed response to questions on March 8. The average yield may rise to 7 percent by June from 6 percent now, according to Shenyin & Wanguo Securities Co., the first brokerage incorporated in China and ranked the nation’s most influential research provider by New Fortune magazine in 2010.