SHANGHAI Dec 16 At least 46 Chinese firms
shelved debt issuance plans totaling over 50 billion yuan ($7.20
billion) this month as a rout in the country's bond market
deepened, Reuters calculations showed.
Having already doubled the 20.8 billion yuan called off in
November, cancellations appeared to accelerate in recent days as
the U.S. Federal Reserve's rate hike and hawkish policy stance
triggered a fresh bout of selling in China's bond market.
On Thursday alone, 10 companies, including Chenming Group
and China National Salt Industry Corp, announced debt issuance
During the first half of this month, 46 companies, including
paper maker Chenming Group, green energy firm Xinte Energy, and
semiconductor producer San An Group cancelled their debt
issuance plans, according to statements posted on the website of
China's interbank market.
Saying they would wait for a more favourable time to issue
debt, the companies cited unfavorable market conditions and
higher borrowing costs, as bond yields spiked over the past
month to reflect expectations of higher inflation.
Affected issuers include both private-run and state-owned
For example, State Grid Corp announced on Dec 2 that it
would delay the issuance of 180-day bills worth 10 billion yuan,
"due to relatively big fluctuations in the bond market," in one
of the biggest debt issuance plan killed this month.
During the August-October period, China's treasury yields
had hovered near their lowest levels since the
global financial crisis, but both short-term and long-term
borrowing costs have spiked since mid-November. And bond prices,
which move inversely to yields, tanked.
($1 = 6.9470 Chinese yuan renminbi)
(Reporting by Samuel Shen and John Ruwtich; editing by Simon