Chinese authorities will ensure stability if bond defaults trigger systemic risk in 2022– Moody’s
|Global rating giant Moody’s came out with their analysis on the Chinese bond markets during early Wednesday.
Read: China eyes easing developer funding restriction in $152 billion ABS market
The report initially mentions that the number of defaulters and amount of defaulted bonds in 2022 to remain low relative to China's total onshore and offshore bonds.
“Chinese authorities will encourage debt restructuring or liquidation through the courts for distressed Chinese companies,” said Moody’s. “But the authorities will step in to ensure stability if bond defaults were to spike and trigger systemic risk."
Given the risks emanating from Chinese real-estate firms like Evergrande and Kaisa, such news should build investor morale. However, firmer US Treasury yields weigh on the Chinese stocks at the latest.
Read: Asian Stock Market: Grinds lower amid firmer Treasury yields, China headlines
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