Fears of debt defaults are rising as the credit ratings of more local governments and companies lumbered with excess capacity are downgraded, the China Securities Journal reported Tuesday, citing analysts. Investors have started to undersell bonds of deteriorating companies, with the prices of as many as 14 credit bonds below 80 yuan (US$13.1) as of Monday, the report said. China Investment Securities was quoted as saying that based on issuers’ latest earnings, it expects at least 10 corporate bonds to be delisted, it said. Meanwhile, China Merchants Securities warned that shipping and steel companies could face default risks, the report said.
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