China LGFVs: fears mount of bond defaults

Concern the country’s local government financing vehicles could default on debt are rising, but foreign investors look set to keep buying their bonds.

China LGFVs: fears mount of bond defaults

Some of China’s local government financing vehicles LGFVs are increasingly likely to default on their public debts, but foreign investors can breathe a sigh of reliefany debt collapses will most likely impact lower-tier bonds that are mostly held by local buyers. 

However, the likelihood of defaults of government-linked borrowers underlines the increased risk of investing into Chinese bonds, and the need for foreign investors to do their due diligence in the absence...

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