China’s $400 Billion Pension Sends New Warning on Debt Risks
- Pension fund asked asset managers to review exposure last week
- Threshold set at 95% of face value to gauge bond risks
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One of China’s biggest state-run investors is adding to the chorus of warnings over debt risks at the nation’s cash-strapped developers and local government financing vehicles.
The National Council for Social Security Fund, which oversees about $417 billion according to the latest available figures, has advised asset managers that handle its money to sell some bonds including those from riskier LGFVs and private developers after a review, people familiar with the matter said, asking not to be identified discussing private information. Several of them mentioned that bonds from LGFVs in Tianjin, a debt-saddled northern port city, were singled out.