Investment grade rated Chongqing Nan’an Urban Construction Development sold $800 million in three-year and five-year bonds on Tuesday, extending the recent diffusion of Chinese local authority borrowers into the dollar markets as rising default rates push up domestic borrowing costs.
Local-government financing vehicles such as Chongqing Nan’an have been expressly set up by Chinese local governments to help finance infrastructure development.
In the three months to end June, LGFVs sold a total of $2.7 billion in US dollar-denominated bonds, dwarfing the $200 million raised in the first quarter, according to data provider Dealogic.
By contrast, they sold Rmb418.4 billion-worth...
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