/RATINGS: Moody's says "the PBoC's policy.....>

CHINA: /RATINGS: Moody's says "the PBoC's policy emphasis on deleveraging and

de-risking could abate, because of the additional pressure on the economy from

the coronavirus outbreak." Based on this assumption, Moody's expects that

onshore corporate issuance will continue on an upward trajectory through '20;

exceeding the RMB9.7 trillion reported in 2019. "But onshore investors will

continue to prefer state-owned enterprises over POEs. And among state-owned

enterprises, issuance growth in '20 will - as it was in '19 - mainly come from

local government financing vehicles." Moody's explains that because China will

likely increase infrastructure spending to counter the impact on economic growth

from the disruption caused by the coronavirus, the funding needs of LGFVs will

increase accordingly. Moody's also concludes that onshore bond defaults will

continue to rise in '20, but will unlikely trigger systemic risks, because the

amount of defaulted bonds & # of defaulters will continue to be small relative

to the size of the onshore corporate bond market. Moreover, if defaults increase

materially or potential defaults lead to sig contagion risks, Moody's expects

that the authorities will intervene to prevent them from posing systemic risk.