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A $5.9 Billion Market in China Is Finally Getting Some Attention

  • StanChart sees growing foreign demand for LGFV bonds in 2019
  • Global buyers more confident, LGFV rally to continue: Roch
Chinese Yuan, Hong Kong Dollar and U.S. Dollar Banknotes
Photographer: Paul Yeung/Bloomberg
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It’s been a long time coming, but bonds of debt-ridden borrowing units set up by China’s local governments are finally winning the hearts of international investors.

Global investor participation in dollar bonds of local government financing vehicles has increased in recent months, spurred by greater familiarity with the asset class, according to Standard Chartered Plc, one of the top bond underwriters in Asia ex-Japan. The growing issuance of these high-yielding securities means if one wants to beat the regional bond benchmarks, they cannot ignore them, said Alan Roch, its head of Asia bond syndicate.