CNY398.8 Bln Bond Sales Withdrawn After SOE Default: YiCai

A total of 52 bonds worth CNY398.8 billion were canceled or postponed in the period from November 10th to 19th, YiCai reported citing data from Wind. The bond default by the SOE Yongcheng Coal Group caused rising difficulties in financing primary market bonds and debt issuance, particularly of industrial and urban investment bonds with weak qualifications, YiCai said citing industry sources. Corporate bond issuance rates rose from 3.6843% to 5.4129% from November 2 to 20 due to rising benchmark interest rates and credit spreads, the newspaper reported citing data from Wind and industry sources. Future credit markets will need to recalibrate valuations for bonds, while liquidity and credit risk premiums might continue to expand for SOEs and companies with weak qualifications, YiCai said citing Guotai Junan Securities.