Bloomberg carried an article this Tuesday, underscoring the risks of more bond defaults ahead, in the wake of waning demand for the corporate bonds.
Key Highlights:
“China’s banks, scrambling to adjust to the government’s deleveraging campaign, are likely to add to pressures on the corporate bond market as they shed more of their massive note holdings and de-risk their balance sheets.
Further payment problems are likely.
Chinese banks have pulled back from lending to other firms that use the funds to buy bonds, exacerbating the pressure on the market.”
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