At least 20 Chinese companies have suspended planned bond sales worth RMB15.5 billion ($2.4 billion) over the past week, as the high-profile defaults of three state-owned enterprises and questions about the solvency of a fourth unnerved investors in the world’s second-largest bond market, reported the Financial Times.
Investors dumped bond holdings last week after Yongcheng Coal & Electricity, a state-owned enterprise based in Henan province, defaulted on a RMB 1 billion bond. It was the second high-profile SOE default in recent weeks after Huachen Automotive Group, an industrial group whose assets include a stake in BMW’s China joint venture, said the FT.
On Tuesday, Caixin, a Chinese financial publication, reported that Beijing-based semiconductor company Tsinghua Unigroup had failed to meet a bond payment.
All the companies that have suspended bond sales in the past week blamed “recent market turmoil”. According to data from information provider Wind, they include Henan Transportation and Shipping Development, a state-owned group that was due to close a RMB 1.8 billion bond sale on Tuesday.