China

Insolvent German airline Air Berlin has attracted buyer interest from China’s LinkGlobal Logistics, which is likely to join a growing list of suitors, German newspaper Bild said on Wednesday. The paper said LinkGlobal, which operates German regional airport Parchim, expressed its intention of making a bid to the airline’s administrator in a letter dated Aug. 31 from LinkGlobal’s managing director Jonathan Pang, Reuters reported. LinkGlobal pledged to hand in a bid by the Sept. 15 deadline, according to the letter, a copy of which Bild said it had obtained.

The highest concentration of shadow loans in China is to be found in its slowest-growing province, a study by UBS Group AG shows. The value of shadow loans extended by regional banks in Liaoning, in the northeastern rust-belt region, amounted to 95 percent of their total lending in 2016, according to estimates provided to Bloomberg by UBS analyst Jason Bedford. Lenders in Liaoning have turned to informal banking arrangements to help them get around rules that restrict them from making traditional loans outside their home province, Bloomberg News reported.

China’s cities, towns and counties are facing surging borrowing costs as investors anticipate landmark defaults, Bloomberg News reported. A local government financing vehicle in the country’s east was recently forced to pay a coupon on a bond that matched a record. Average financing costs in credit markets for the units that finance roads, bridges and sewers have jumped, with yields for some borrowers surging the most in six years.

Greenland Holdings Corp., China’s fourth-biggest developer by property sales, said it had overdue loans of 457.5 million yuan ($69.2 million) in some units in the northeast province of Liaoning at the end of June, underscoring concerns about the company’s debt problems, Bloomberg News reported. Companies under Greenland’s unit in Liaoning had overdue short-term debt of 247.5 million yuan, as well as 210 million yuan in long-term obligations, according to Greenland’s interim report dated Aug. 25.

Venezuela's close ally China said on Monday that history shows external interference and unilateral sanctions only make things more complex and will not help resolve problems, after the United States imposed new sanctions on Venezuela, the International New York Times reported on a Reuters story. U.S. President Donald Trump signed an executive order that prohibits dealings in new debt from the Venezuelan government or its state oil company on Friday in an effort to halt financing that the White House said fuels President Nicolas Maduro's "dictatorship".

Rising corporate profits are providing Chinese policymakers with room to do more to tackle the country’s growing debt problems without inflicting major damage on the economy, the International New York Times reported on a Reuters story. Profits are increasing even though financial conditions are tightening in some significant areas of the economy; lending rates have inched higher, regulators have clamped down against risky lending and have moved to take the heat out of the property sector.

Almost a year after China rolled out steps to rein in soaring corporate leverage, concerns are rising that undeserving companies are benefiting while households are getting saddled with risks, Bloomberg News reported. China unveiled guidelines for debt-to-equity swaps in October, part of measures to trim the world’s biggest corporate debt loads. The idea was that healthy firms would use the program to cut interest-bearing borrowings, while bloated companies would be shunned.

China's moves to crack down on illicit banking activities have achieved initial targets and 20 sets of new regulations to increase supervision will be issued this year, the chief of the banking regulator's Prudential Regulation Bureau said on Friday, the International New York Times reported on a Reuters story. The new regulations will cover policy banks, online lending, interest rate risks and asset management firms, Xiao Yuanqi told a briefing.

Growth in China’s broad money supply slipped to a fresh record low, signaling authorities aren’t letting up in their drive to curb excess borrowing and safeguard the financial system, Bloomberg News reported. Authorities pushing to cut excess leverage have squeezed the massive shadow bank sector, which shrank for the first time in nine months. Yet with aggregate financing remaining robust and bond issuance rebounding, the central bank is still providing ample support for businesses to avoid derailing growth ahead of a key Communist Party congress this fall.

China had unexpected buoyancy in its economy to thank for an easing off in corporate defaults in the first half, Bloomberg News reported. But as growth shows signs of pulling back, the question is: will it last? Despite alarm over the risks posed by China’s daunting debt pile ticking up in the first six months of the year, the country actually saw a drop in corporate distress, with 0.27 percent of issuers defaulting, versus 0.55 percent in all of 2016, according to China Lianhe Credit Rating Co. Goldman Sachs Group Inc., too, saw Chinese company leverage drop in the first half.