China's recent private company bond.....>

CHINA PRESS: China's recent private company bond defaults reveal the risks

facing individual companies, but do not pose systemic financial risks, a top

financial regulator of the bond market said, according to Shanghai Securities

News on Friday. 

- As China's liquidity tightens, private companies' various problems, such as

high leverage, high-risked investment activities and unsustainable debt

structures, caused bond defaults; the new WMP rules also increases pressure on

commercial banks, reducing funds for private companies, the regulator told the

newspaper;

- More bond defaults are likely to happen if China's macro-economic environment

does not change significantly, but the default rate should be far lower than

banks' bad loans rates and the situation is controllable, the regulator said. 

- Regulators are taking measures to study and create a trading system for

transferring defaulted bonds to third-parties such as private funds and AMCs.