Chinese corporate bond financing hit a record low in May, as a market rout discouraged new issuance while a wave of previously issued notes came due. According to the Financial Times, the combination of tight liquidity and a regulatory crackdown on leveraged investment in bonds has hammered China’s debt market in recent months. Net corporate bond financing – new issuances less maturities – totaled negative Rmb217bn ($31bn) in May, well below the previous record low of negative Rmb89bn in February. A “regulatory windstorm” led by China’s ambitious new banking regulator, Guo Shuqing, has targeted banks’ use of borrowed money to invest in bonds. The People’s Bank of China has also drained liquidity from the money market, making it more expensive for banks to borrow from each other to fund bond purchases. The benchmark yield on Chinese five-year notes rated double-A has risen steadily since late last year, hitting 5.7% on Tuesday, up sharply from 3.43% in late October.