The deadline passed Monday for local government bond issuers in China to classify liabilities for inclusion in regional authorities’ debt reports for review by the finance ministry, capping a month of borrowing costs soaring on speculation that some local government financing vehicles (LGFVs) will lose government support, Bloomberg reported. Premier Li Keqiang has stepped up curbs on local borrowings just as the vehicles prepare to repay RMB558.7 billion (US$89.8 billion) of bonds this year amid slowed economic growth. “LGFV bonds that don’t get classified as local government debt will lose government guarantees and their credit risks will be re-priced,” said Huo Zhihui, an analyst at China Credit Rating in Beijing.
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