The Financial Times reports thata a unit of Guosen Securities, China’s eighth-largest investment bank, has defaulted on a Hong Kong-traded renminbi bond.
The default represents, as the Financial Times notes, “the first debt breach by a state-owned enterprise in China’s offshore bond market in nearly two decades.”
The FT adds: “The technical default by Guosen’s Hong Kong affiliate puts at risk a Rmb38m ($5.9m) coupon payment due April 24 on Rmb1.2bn in “dim sum” bonds sold in 2014. Missing that payment would set a precedent for the offshore units of Chinese SOEs, whose creditors widely assume the onshore parent will always stand behind its affiliates, according to analysts.”
(Market News Provided by FXstreet)