Moody's Investors Service says that Chinese...>

CHINA: Moody's Investors Service says that Chinese local government financing

vehicle (LGFV) bonds are growing as an asset class in both the onshore and

offshore markets, with record issuance predominantly driven by increased

infrastructure investment.

- "Along with issuance volumes, LGFV bond maturities are also rising

significantly, with $21 billion of offshore bonds and RMB2.2 trillion of onshore

bonds falling due through 2020, with the potential to raise some refinancing

risk," says Ivan Chung, an Associate Managing Director in Moody's Corporate

Finance Group.

- The growth in offshore bonds comes despite restrictions imposed in June on

offshore bond issuance, and is driven in part by pending issuance and

refinancing needs. Credit risks for the bonds vary, says Moody's. Credit spreads

over US Treasuries vary significantly for offshore LGFV bonds of the same tenor,

reflecting the market's view that they carry very different risk profiles, while

LGFV ratings also range from Ba2 to A3.

- Link: https://tinyurl.com/y5tlqd34