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China investment bank defaults on ‘dim sum’ bond' - FT

Discussion in 'Fundamental Analysis' started by FXStreet_Team, Mar 31, 2016.

  1. FXStreet_Team

    FXStreet_Team Well-Known Member Trader

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    The Financial Times reports thata a unit of Guosen Securities, China's eighth-largest investment bank, has defaulted on a Hong Kong-traded renminbi bond.

    The default represents, as the Financial Times notes, "the first debt breach by a state-owned enterprise in China’s offshore bond market in nearly two decades."

    The FT adds: "The technical default by Guosen's Hong Kong affiliate puts at risk a Rmb38m ($5.9m) coupon payment due April 24 on Rmb1.2bn in “dim sum” bonds sold in 2014. Missing that payment would set a precedent for the offshore units of Chinese SOEs, whose creditors widely assume the onshore parent will always stand behind its affiliates, according to analysts."
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