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Number of China Bond Defaults Touches Last Year’s Record

Number of China Bond Defaults Just Touched Last Year’s Record

(Bloomberg) -- The total number of Chinese onshore company bond defaults this year just equaled the record set for the whole of 2018.

New defaulted bonds reached 120 this week, according to data compiled by Bloomberg. The missed payments totaling 102.9b yuan ($14.6 billion) is approaching last year’s all-time high of 122 billion yuan. Some 45 companies have defaulted on their debt year-to-date versus 40 in the previous year, Bloomberg data show.

Number of China Bond Defaults Touches Last Year’s Record

The rise in defaults come in the wake of a slowing domestic economy and policymakers’ growing acceptance that over-leveraged enterprises should be allowed to fail. Industrial Securities Co. sees more more failures in the coming months.

“There will be more defaults in the fourth quarter compared to the previous three quarters,” said Huang Weiping, an analyst at Industrial Securities. “Historically this year will see the greatest number of defaults but any shock will be relatively controlled.”

To contact Bloomberg News staff for this story: Rebecca Choong Wilkins in Hong Kong at rchoongwilki@bloomberg.net;Molly Dai in Singapore at bdai13@bloomberg.net;Jing Zhao in Beijing at jzhao231@bloomberg.net

To contact the editors responsible for this story: Neha D'silva at ndsilva1@bloomberg.net, Chan Tien Hin

©2019 Bloomberg L.P.

With assistance from Bloomberg