Zhongyuan Yuzi pulls deal as Chinese LGFVs face tricky funding environment

Beijing_Great Wall_China_575px_Adobe_29May20
By Morgan Davis
29 Oct 2020

Two Chinese local government financing vehicles (LGFVs) hit speed bumps in the dollar bond market this week amid rising volatility, as investors pushed back on the issuers’ attempts to get away with aggressive pricing. While one of the borrowers sealed its deal despite tepid demand, another was forced to scrap its transaction. Morgan Davis reports.

China’s LGFVs, like other dollar borrowers, have benefited from the low rate environment this year. They have consistently priced their deals at new lows. But that strategy may no longer be the best approach — as two borrowers found this week, when they tried selling bonds just days before ...

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