The China Bonds Investors Hate to Love Are Top Pick for 2020
- Survey shows local government financing vehicles in favor
- China may see third straight year of record defaults: survey
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China’s local government financing vehicles are seen as the top investment among the nation’s corporate bonds next year as state backing limits the risk of default, a survey showed.
Local governments’ financing vehicles, which now have 8.4 trillion yuan ($1.2 trillion) outstanding, have long had a shadow over them because many lack sustainable revenues to make debt payments, and it’s not entirely clear they have the full backing of the public purse. Ratings agencies have been warning about the potential for defaults for at least half a decade.