China securities regulator warns of further bond default risks
Updated : May 18, 2018 05:47 PM IST
The government is in the third year of a regulatory crackdown on riskier lending practices, which has slowly pushed up borrowing costs and is pinching off alternative, murkier funding sources for companies such as shadow banking.
The wave of defaults has been accompanied by an increase in the premium investors demand for holding riskier debt.
The spread between 5-year Chinese government bonds and AA-rated 5-year corporate bonds was at 211 basis points on Friday, an increase of nearly 48 basis points over the previous six months.