How Bond Defaults Are Changing China's Markets

For years, defaults were few and far between in China's corporate bond market. Most investors thought that the Chinese government would never let companies — whether they be state-owned enterprises (SOEs) or private businesses — actually default on their debt, Bloomberg News reported. But times have changed. Defaults by private companies have been rising and there's even a question mark over the implicit government guarantee in debt sold by SOEs. One state-owned enterprise in Tianjin has proposed a 64% haircut for bond investors, in what could amount to the first de facto default by an SOE in more than two decades. Read more

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