The increased wariness has helped push new borrowing costs for these businesses to their highest in nearly two years, marring what has so far been a banner year for debt issuance.
In November, corporations with below triple-A credit ratings paid an average 5.89% coupon for stock-exchange listed debt, according to Wind, the highest since January 2019. In contrast, triple-A coupon rates dipped to 4.09%. Some Chinese bonds trade on exchanges while others trade in the so-called interbank market.
Overall, Chinese companies, including financial ones, issued the equivalent of $2.3 trillion in yuan-denominated bonds in the year through Dec. 8, already 33% more than 2019’s total, according to Wind. More than a third of the total was made up of commercial paper, short-term debt that comes due in less than a year.
Chang Li, a Beijing-based director at S&P Global Ratings, said borrowing costs have risen in particular for companies in northeastern and western provinces where local governments have limited financial resources. Costs have also risen in industries burdened by overcapacity, he said. That would likely include companies specializing in areas such as mining, chemical production and heavy industry.
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bloody rent seekers trying to front run the PBoC like they did the FED. Nice try
Maybe Biden will arrive just in time.
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