China LGFV Bond Sales Boom Again as Beijing Steps Up Support
- August local bond issuance surged to third biggest on record
- Dominance of short tenors shows caution over long-term outlook
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China’s local government financing vehicles are staging a comeback in credit markets, with a surge in yuan bond sales as Beijing intensifies efforts to defuse risks from the debt-laden group of borrowers.
Domestic bond issuance by LGFVs, which are typically tasked to build infrastructure projects, reached nearly 620 billion yuan ($85 billion) in August, an almost 50% jump from July and the third-highest monthly tally on record, Bloomberg-compiled data show.