Updated
Updated · Bloomberg · Jun 30
China's NDRC Curbs Offshore Debt Above 4% Yuan, 5% Dollar Yields
Updated
Updated · Bloomberg · Jun 30

China's NDRC Curbs Offshore Debt Above 4% Yuan, 5% Dollar Yields

2 articles · Updated · Bloomberg · Jun 30

Summary

  • The NDRC has told select Chinese bankers in recent weeks to avoid underwriting offshore yuan notes yielding more than 4% and dollar bonds yielding above 5%, people familiar with the matter said.
  • Those caps target higher-cost overseas borrowing as Beijing tries to contain risks among municipal-linked borrowers that carry more than $100 billion of offshore bond debt.
  • The move marks another tightening step in China's oversight of offshore fundraising, signaling greater scrutiny of issuers willing to pay elevated yields to tap foreign markets.

Insights

A $131 billion 'refinancing wall' is looming. Can Chinese firms survive without high-yield offshore debt?
As China caps offshore bond yields to curb risk, can it still successfully globalize the yuan?
Can capping offshore yields prevent a crisis when China is reportedly hiding $3 trillion in bad debt?