April 4 (Bloomberg) -- Suntech Power Holdings Co. and LDK Solar Co. sank in U.S. trading on concern new lending initiatives in China may increase borrowing costs for the world’s largest solar companies.
Suntech, the world’s biggest maker of solar panels, dropped 2.1 percent to $2.79. LDK, the second-biggest maker of solar wafers, retreated 3.3 percent to $3.49. Trina Solar Ltd., China’s third-biggest maker of solar panels, fell 3.1 percent to $6.54 per share.
Solar companies’ borrowing costs will rise if policies by China’s Premier Wen Jiabao to boost the country’s non-bank lending are put in place, said Hari Chandra Polavarapu, an analyst at Auriga USA in New York.
“Their banking system lends an enormous amount to the Chinese solar players, and if the screws are tightened on those banks, they’d have to raise rates on the solar companies,” Chandra Polavarapu said in a phone interview.
China needs to break a banking “monopoly” of a few big lenders that make easy profits because it’s hard to borrow money elsewhere, Wen said yesterday, as cited by China National Radio.
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