China Fuels Speculation Debt-for-Equity Swaps Starting Soon
- State Council statement seen as signaling trial will go ahead
- Swaps may be tool for tackling build-up of leverage, bad debt
This article is for subscribers only.
China’s cabinet fueled speculation that the nation is pressing ahead with debt-to-equity swaps that would give lenders stakes in some companies as part of tackling a build-up in corporate leverage and bad loans.
A brief reference in a statement on Monday to letting financial institutions hold stakes in companies in a trial indicated that the swaps are coming soon, according to China Merchants Securities Co. analyst Ma Kunpeng.