China Top Underwriter Sees More Defaults as Bond Sales Jump 66%
- China Securities expects "many credit events" as funds tighten
- Offerings of notes reached 2.48 trillion yuan in first quarter
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China’s top corporate bond underwriter said defaults will increase this year, casting a cloud over the market after record offerings in the first quarter helped refinance debt.
Six firms reneged on obligations in the first three months, up from zero in the year-earlier period, as Premier Li Keqiang sought to cut the number of “zombie companies” in an economy transitioning to slower growth. While note sales surged 66 percent to 2.48 trillion yuan ($383.6 billion) this year, China Securities Co. said non-payments will escalate further, causing disruptions in the months ahead.