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China Faces More Bond Market Risks After Chaori, CICC Says (1) 

March 19, 2014
Bloomberg News

China will face more risks in its bond market following the country’s first default on onshore debt, according to China International Capital Corp.

“Looking at the second quarter, we think the worst of credit risk is far from over,” bond analysts Ji Jiangfan, Zhang Li, Xu Yan and Wang Zhifei at CICC wrote in a March 14 report. “Lower-rated bonds’ credit premiums may stay at high levels or rise to new highs.”

The collapse of developer Zhejiang Xingrun Real Estate Co., which government officials said yesterday doesn’t have enough cash to repay 3.5 billion yuan ($566 million) of debt, is adding to concerns nonpayments may spread. CICC flagged 12 companies with outstanding onshore bonds in “great need” of more scrutiny after changes in the credit profiles of the issuers, including Sinovel Wind Group Co. (601558) and Baoding Tianwei Baobian Electric Co. (600500)

Read more: Bloomberg

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