A new Moody’s report paints a relatively bleak picture for weaker companies going forward in trying to access the onshore bond market.
The report indicates that stricter guidelines on corporate bond issuance through the Shanghai and Shenzhen Stock Exchanges could potentially push them to turn to higher-cost funding sources.
The tightening follows a steady increase in defaults during the past two years from a low base and a number of high-profile defaults in recent months.
Such restrictions will reduce liquidity for weak companies, said Moody’s, especially given that corporate bond issuance is one of the most common sources of non-bank funding for Chinese companies....