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China Local-Government Borrowing Costs Drop After Trust Bailout

Borrowing costs for China’s financiers of roads, subways and sewage plants dropped after a troubled trust product was bailed out, averting a threatened default that added to concern about record local debt.

The average yield on five-year notes rated AA, the most common grade for the so-called local-government financing vehicles, dropped two basis points yesterday to 7.58 percent, the biggest decline in more than two weeks.