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China Inc's $287 bn perpetual bonds flash warning signs amid fund crunch

China's efforts to cut speculative borrowing have made funding harder to obtain for the nation's private sector

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Illustration: Binay Sinha

Bloomberg
Chinese firms combating tight funding conditions are bracing for the next shoe to drop: a record amount of perpetual bonds up for redemption.  

Some 48.9 billion yuan ($7 billion) of perpetual notes will have first call dates this quarter, which means they either have to repay the debt or be forced to increase interest rates by as much as 500 basis points. While state-owned firms, which make up a big portion of these issuers, are widely expected to redeem on call dates this quarter, all eyes are on whether the private companies that are struggling to raise funds can pay.

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First Published: Oct 29 2018 | 3:31 PM IST

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