Moody's warns on China local government debt, financing vehicles

Moody's lowered its outlook for China's sovereign credit rating to stable from positive in April. Photo: Bloomberg

The ability of the mainland's local governments to repay their debt is being questioned, with analysts warning that the liabilities may be underestimated. Increased use of irregular financing activities such as trust loans, leases, wealth-management products and project financing pose a risk to local government finances, Moody's analyst Debra Roane said in a report.

Monday, 17 June, 2013, 5:52am

China microlenders get death threats as they try to recover bad loans

There are 6,555 microcredit firms on the mainland. Photo: Bloomberg

The mainland economy decelerated to grow at 7.7 per cent in the first quarter, sending banks' non-performing loans (NPLs) climbing for a sixth consecutive quarter. There are no official statistics on the asset quality of privately owned credit firms, which mainly serve small and medium-sized enterprises (SME).

8 Jun 2013 - 3:39am

Premiums drop for top Chinese firms' debt

Aluminum Corp of China sold February 2014 debt at 3.75 per cent last month. Photo: Reuters

Top-rated companies on the mainland are paying the lowest premiums to sell debt in nearly 27 months, showing investor confidence in state-backed firms even as the overall economy flags.

7 Jun 2013 - 3:46am

Concern raised over China credit growth

Concern raised over mainland credit growth

Total lending from banks and other financial institutions on the mainland was 198 per cent of gross domestic product last year, compared with 125 per cent four years earlier, according to calculations by Chu, the company's Beijing-based head of China financial institutions.

30 May 2013 - 4:33am

China tightens rules for local government debt sales

China tightens rules for local government debt sales

The financing companies, set up by local governments to fund projects, would undergo extra scrutiny if their debt-asset ratio exceeded 65 per cent and the debt to be issued was rated below AA-plus, sources said, citing a notice from the National Development and Reform Commission earlier this month.

8 May 2013 - 5:41am

HNA-owned shipping firm Grand China Shipping chased for US$60m

Grand China Shipping is chased for unpaid charter hire and ship broker commissions on ships leased. Photo: Bloomberg

Creditors are seeking at least US$60 million from Grand China Shipping (Hong Kong), a Hong Kong-registered shipping subsidiary of HNA Group, a leading mainland company which has financier George Soros as a shareholder.

25 Apr 2013 - 5:30am

Beijing urged to reform debt market

Frank Gong says reform of regulations is needed to boost the market's efficiency. Photo: Nora Tam

As mainland companies face growing difficulty getting credit from domestic banks or raising capital on the stock market, they are left to securing funds through large, long-term bond issues, says a top banker.

22 Apr 2013 - 2:50am

Fitch cuts China's credit score as debt increases

Fitch Ratings had cut China's long-term local-currency debt rating to A-plus from AA-minus. Photo: Bloomberg

For the first time, Fitch Ratings has downgraded one of its sovereign ratings of China, citing the rapid expansion of credit in the country. The international ratings agency announced yesterday that it had cut China's long-term local-currency debt rating to A-plus from AA-minus.

10 Apr 2013 - 3:57am

Bank of East Asia sues Rafael Hui over alleged debts

Rafael Hui Si-yan. Photo: Edward Wong

In a writ filed with the High Court on Friday, the bank asks Hui for payment of all money due under the two overdraft facilities under two facility letters and two credit cards provided by the bank to Hui under a card holder agreement. The bank also wants him to pay interest and costs related to a breach of the terms of the facility letters and the agreement.

7 Apr 2013 - 5:28am 3 comments

West China to cut back on cement output

West China Cement wants to improve cash flow. Photo: Bloomberg

Huge infrastructure projects will drive demand for cement in Shaanxi province, but West China Cement will slow its capacity expansion in the next few years to lighten its debt burden. The Hong Kong-listed firm's cement production and sales are mostly in the northern province.

20 Mar 2013 - 4:35am

Suntech Power fails to repay US$541m bond

Suntech's plant in Arizona.

The move pushed what was once the world's biggest solar panel maker into default on credit lines it had with the International Finance Corp and mainland lenders, Suntech said yesterday in a statement from its headquarters in Wuxi.

19 Mar 2013 - 5:34am

Forecasts drive up car bond sales

Geely is helping drive up debt issuance this year. Photo: Xinhua

Guangzhou Automobile Industry Group, Zhejiang Geely and Wanxiang Qianchao are among companies that have sold 8.2 billion yuan (HK$10.1 billion) of debt so far this year, compared with 2.5 billion yuan a year earlier, according to data compiled by Bloomberg. Overall corporate bond sales rose 21 per cent to 399 billion yuan.

7 May 2015 - 2:35pm

Mainland corporate borrowing soars to service debt

Mainland corporate borrowing soars to service debt

Mainland companies are spending more than ever to service debt after their borrowing almost tripled over five years, prompting strategists to warn of rising default risk and a threat to economic growth.

29 Jan 2013 - 5:31am

Asset managers calm worries over junk bonds

Sean Chang of Baring Asset Management said he would encourage investors to buy junk bonds, especially in the property sector.

The recent debt issues by mainland developers in Hong Kong will not result in excessive supply and investors should still consider these high-yield bonds as an attractive asset class this year, asset management firms say.

18 Jan 2013 - 5:27am

More fiscal stimulus may add to Japan debt woes

Japan's debt burden will become "more serious" as its government takes extra steps to stimulate growth in the world's third-biggest economy, according to an International Monetary Fund economist.

16 Jan 2013 - 3:41am