May 25, 2018 / 12:42 AM / in 4 months

China regulators say bond defaults don't pose systemic risks - paper

SHANGHAI, May 25 (Reuters) - Recent defaults in China’s corporate bond market don’t pose systemic risks, and regulators are studying measures to deal with those problematic debt obligations, the official Shanghai Securities News reported, citing unidentified regulators.

Defaults by Chinese private firms were the result of tighter credit conditions as the new asset management rules forced banks to shrink their off-balance-sheet, the newspaper said.

Regulators are studying market-oriented measures to deal with bond defaults, with plans to introduce private funds and asset managers to participate in debt restructuring of those companies that defaulted, it said.

Eleven companies in China have defaulted on interest and principal payments on 18 bonds worth a combined 15.6 billion yuan ($2.45 billion) since January, data compiled by Reuters showed. Twelve of those defaults have come since the beginning of March. ($1 = 6.3757 Chinese yuan renminbi) (Reporting by Samuel Shen and John Ruwitch Editing by Shri Navaratnam)

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