Qinghai Investment joins LGFV bond rush

The BB-rated company becomes the first local government financing vehicle to sell a dollar bond this year, attracting $2.5 billion of orders for its $300 million deal.

Qinghai Investment Group, a BB- rated local-government financing vehicle LGFV, made its first foray into the international bond markets on Wednesday, raising $300 million in an investor-friendly deal.

The company is a state-owned enterprise of Qinghai Province, involving in local infrastructure investments and manufacturing aluminum products. Its 2015 sales rose 9.3% year on year to Rmb 14.1 billion, while its net profit fell by 51.5% to Rmb 44.8 million for the same period, according to the company’s latest annual results posted on the Shanghai Stock Exchange.

The province's credit weaknesses include its very weak budgetary performance, high debt burden, and very high contingent liabilities, analysts...

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