Date
18 November 2017
Chinese companies raised more than US$100 billion worth of corporate bonds in the first nine months. Photo: AFP
Chinese companies raised more than US$100 billion worth of corporate bonds in the first nine months. Photo: AFP

China halts corporate bond sales amid crackdown

China has suspended the sale of corporate bonds in a deepening crackdown on corruption, Bloomberg reported Wednesday.

It’s not clear when approvals will resume but the National Development and Reform Commission, the country ‘s top economic planner, is expected to tighten regulations for corporate bond sales.

Chinese companies raised more than US$100 billion worth of corporate bonds in the first nine months, according to data from China Central Depository and Clearing Co.

The suspension underlined government unease over debt risks after a string of financial irregularities in bank lending, trust financing and bond issuance was exposed this year, the report said.

China has been tightening regulation of its interbank bond market since opening it to qualified foreign institutional investors in 2011.

Credit concerns are escalating as property prices fall, state banks increase bad-loan provisions and at least 10 trusts have been struggling to meet payments since May.

Listed companies in China can service their debts in a separate corporate bond market which falls under the jurisdiction of the China Securities Regulatory Commission, according to unnamed sources familiar with the matter

A former head of the NDRC’s fiscal and financial affairs department is being investigated in relation to corporate bond issuance dating back to 2005, Caixin magazine reported Aug. 13.

China’s anti-graft watchdog is investigating brokerages for possible bribery with a focus on bond underwriting, 21st Century Business Herald reported June 17.

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