Default Risk China Trusts

“We see default risk for China trusts increasing in coming quarters due to tightening of financial conditions and falling mining/property companies’ cash flow. Among various trust types, we gauge energy & mining trusts invested in private projects to have the largest risk stemming from low profitability and less government support. LGFV bonds have relatively less risk as per our analysis due to lower funding cost, longer duration, and clear incentive for local governments to support them.”

China Trusts

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