China $134 Billion Maturity Wave May Trigger More Defaults
- Tighter financing claimed six bond failures in first quarter
- Cash flow, profit margin both worsened for smaller firms
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Investors in local-currency Chinese corporate bonds need to be on alert this year, with record maturities and a government crackdown on debt increasing the risk of more defaults.
There were six defaults on bonds in the first quarter, the most since the April-June period of last year, and investors and analysts are predicting more as interest rates rise and China clamps down on excessive borrowing. The tighter financing environment is hitting smaller private-sector firms hardest, as they haven’t benefited from capacity cuts.