Free Trial
USDCAD TECHS

Bear Cycle Still In Play

AUDUSD TECHS

Firmer Short-Term Tone

EURJPY TECHS

Watching Support

Real-time Actionable Insight

Get the latest on Central Bank Policy and FX & FI Markets to help inform both your strategic and tactical decision-making.

Free Access
MNI (London)
BEIJING (MNI)

Issuance of local government special-purpose bonds is expected to help raise about CNY5.5 trillion for infrastructure investment this year, but pressure from rolling over maturing debt may weigh on indebted local governments, according to a report by China Chengxin Credit Rating Company.

About CNY3 trillion of SPLG may be invested in infrastructure in 2021, with issuance peaking in Q2 and Q3. Investment would mainly go into projects including transportation, new energy and the like, the report said. Local government need to issue up to CNY3 trillion in general bonds to repay debt maturing this year, with about CNY1 trillion in SPLG also due, China Chengxin noted.

The report warned local governments are increasingly dependant on bond issuance to repay maturing debt given current fiscal revenue and spending are out of sync as economies recover from the Covid crisis. The authorities must improve the investment efficiency of SPLGs, the report indicated.

Chengxin also noted CNY9.3 trillion of corporate bonds will mature over the next three quarters, greater than the amount in the same period of 2020, which may bring increased default dangers as companies have not yet fully recovered from the pandemic, the report showed, noting a total of 69 cooperate bonds defaulted in Q1, mainly in the transport and real estate sectors.

MNI London Bureau | +44 203-865-3812 | les.commons@marketnews.com
True
MNI London Bureau | +44 203-865-3812 | les.commons@marketnews.com
True

To read the full story

Why Subscribe to

MarketNews.com

MNI is the leading provider

of news and intelligence specifically for the Global Foreign Exchange and Fixed Income Markets, providing timely, relevant, and critical insight for market professionals and those who want to make informed investment decisions. We offer not simply news, but news analysis, linking breaking news to the effects on capital markets. Our exclusive information and intelligence moves markets.

Our credibility

for delivering mission-critical information has been built over three decades. The quality and experience of MNI's team of analysts and reporters across America, Asia and Europe truly sets us apart. Our Markets team includes former fixed-income specialists, currency traders, economists and strategists, who are able to combine expertise on macro economics, financial markets, and political risk to give a comprehensive and holistic insight on global markets.