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Chinese Investors Balk at Company Bonds From Riskiest Province

  • Northeastern province of Liaoning sees corporate yields jump
  • Dongbei Special Steel flags investor challenges in province
Xinghai square, Dalian.

Xinghai square, Dalian.

Photographer: Eric Gregory Powell/Getty Images
Updated on

Investors are balking at bonds sold by companies in China’s province most vulnerable to financial risks, amid concerns the government is cutting support for troubled firms.

Right Way Real Estate Development Co., a developer based in the city of Dalian in the northeastern province of Liaoning, sold five-year AA rated notes at a yield of 7 percent on July 26. That was 289 basis points higher than the average on similar-maturity securities nationwide. Xinmin City Luxin Municipal Engineering Co., a local government financing vehicle also based in Liaoning, issued seven-year AA rated debentures at 6.41 percent in the same month, 206 basis points higher than the market yield.