Chinese Bond Defaults Seen Rising as Borrowing Costs Climb
- All 22 people surveyed say corporate debt failures will rise
- 72% say yield premiums on corporate notes to increase
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Chinese corporate defaults will likely spread next year as borrowing costs climb, financial companies surveyed by Bloomberg said.
All 22 bond traders, analysts and others surveyed forecast China’s corporate default rate will rise in 2016, while over 70 percent expect the extra yield on corporate notes to increase. The premium on five-year AA rated company securities over government notes has risen to 173 basis points after plunging to an eight-year low of 169.2 basis points last month.