Corporate Debt

Chinese corporate bond defaults seen rising into 2021

Ratings agency Moody's reckons corporate bond defaults will increase into next year, while rival Fitch sees continued pressure on company ratings across the region.

Even though the International Monetary Fund has characterised China as the only major global economy to show positive growth in 2020, onshore and offshore corporate bond defaults in the country could continue to rise over the next 12 months.

The positive growth in itself is not enough, concludes a new report from ratings agency Moody’s, which reckons that companies' weak liquidity and investors' heightened risk aversion could be the main factors driving defaults this year and the next.

“Earlier this year and because of the Covid-19 pandemic, the Chinese government injected lots of liquidity into the market. As a result of that, some of the...

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