KONTAN.CO.ID - SHANGHAI. A state-owned enterprise (SOE) in China's northern province of Inner Mongolia defaulted on part of a 1 billion yuan ($142.1 million) privately-issued bond over the weekend, the latest in a string of corporate delinquencies that has raised concerns about contagion risk as the economy slows. Hohhot Economic and Technological Development Zone Investment Development Group, owned by the local government of Hohhot, said on Monday it was in the process of repaying the money after the Dec. 6 deadline. The failure to meet bond repayments puts the spotlight on other debt-laden municipalities that have borrowed heavily in recent years and raises questions about where the central government would tolerate an increase in defaults as they let markets play a bigger role in discerning risk.
Fresh China bond default flags worries over weak state-backed borrowers
KONTAN.CO.ID - SHANGHAI. A state-owned enterprise (SOE) in China's northern province of Inner Mongolia defaulted on part of a 1 billion yuan ($142.1 million) privately-issued bond over the weekend, the latest in a string of corporate delinquencies that has raised concerns about contagion risk as the economy slows. Hohhot Economic and Technological Development Zone Investment Development Group, owned by the local government of Hohhot, said on Monday it was in the process of repaying the money after the Dec. 6 deadline. The failure to meet bond repayments puts the spotlight on other debt-laden municipalities that have borrowed heavily in recent years and raises questions about where the central government would tolerate an increase in defaults as they let markets play a bigger role in discerning risk.