China's New Crackdown on Regional Debt May Curb Bond Sales
- New rules cut regional government fiscal data from documents
- Intention is to rule out association with government aid: S&P
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Local government financial vehicles in China have started to exclude some data in bond prospectuses, and S&P Global Ratings said the changes suggest that such firms may have more difficulty raising funds offshore.
The finance ministry said last month that LGFVs mustn’t disclose fiscal and borrowing figures of local governments, which would imply support from the authorities, in bond sale documents including prospectuses. The National Association of Financial Market Institutional Investors, a Chinese local bond regulator, has also given underwriters such guidance, according to people familiar with the matter.