Huating Road & Bridge Group Co Ltd has warned that it may default on interest and the principle repayment of a 400m yuan bond reports Reuters. The chairman of the company is assisting with an official investigation.
The Chinese Lianhe credit agency has downgraded the bond to BB+ from AA-
Reuters report that this will be the first public bond default to hit the Chinese interbank market and the first default on a corporate bond.
Some months ago the market got spooked by these types of headlines but it’s largely being ignored. It’s not an amount that will worry the market and China’s banks have more than ample money set aside for problems like these.
I’m not sure if the Reuters headline about this being the first actual default of principle is accurate but there have been defaults of interest payments. If it is then that might make some waves.
