Chinese companies have sold $4.1 billion worth of bonds to strengthen their finances against a stalling business environment, taking advantage of the government’s order to relax funding approvals to help the nation overcome its worst public health crisis since 2003, reported the South China Morning Post.
Legend Holdings, China International Capital Corporation (CICC) and China State Shipbuilding are among the Chinese borrowers that have sold new debt in recent weeks, continuing a record-breaking $9 billion start to the year for bond issuance across Asia.
The fundraising by Chinese companies adds to the RMB 6.8 trillion ($974 billion) of corporate bonds that are scheduled to mature this year, a second high-water mark after last year’s record of RMB 7.6 trillion. Bonds can provide companies with a relatively swift way of bolstering their finances against any fallout from the viral disease, dubbed Covid-19.
“Some of these companies are adopting a defensive stance, taking money now as they don’t know what will happen down the road and many have refinancing needs later on in the year,” said Tim Fang, head of global markets at Hong Kong-headquartered investment bank AMTD Group.