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China sees first corporate bond default

Posted at March 7, 2014 | Categories : News

China has today seen its first corporate bond default, with Shanghai Chaori Solar Energy Science & Technology announcing that it will not be able to service a second interest payment of USD14.7 million.

According to Chinese news agency, xinhuanet, the default by the solar panel maker hampered investors’ sentiment although market watchers believe “a normal economy needs such defaults to better price bonds”.

Meanwhile, Bloomberg reckons that the number of Chinese companies with debt double equity has soared since the global financial crisis, suggesting that the country’s first onshore bond default won’t be the last.