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China's regulators examining policy on listed firms' debt financing - Xinhua
January 18, 2017 / 1:52 AM / 10 months ago

China's regulators examining policy on listed firms' debt financing - Xinhua

SHANGHAI, Jan 18 (Reuters) - China’s regulators are examining the offical policy governing listed firms’ debt financing practices, the Xinhua news agency said on Tuesday, suggesting a regulatory review may be underway.

The country’s listed firms have been increasingly making private debt placements - high-yielding bonds sold directly to institutional investors in one-to-one deals - which are risky because their pricing is not subject to market scrutiny.

The debt was also issued by firms in economic sectors which accounted for much of the rise in corporate defaults in 2015.

The bar for financing by listed firms is set lower than for private firms, so the volume is larger which has led to illegal practices, the agency said.

Xinhua did not say which regulators were examining the policies, nor did it mention any specific regulations that were under scrutiny.

Reporting by Engen Tham; Editing by

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