Don't shut the door on China's SME borrowers yet
A spate of restructurings and defaults by Chinese companies has spooked the syndicated loans market and some banks are now saying there will be a flight to quality. However, by squeezing lending to mid-cap names, banks could miss out on funding the next Xiaomi or Alibaba. Instead they should improve their credit checks and look for more innovative solutions.
The swirl of negative corporates stories from China is causing ripples in the syndicated loan market.
Take the case of footwear manufacturer Ultrasonic, which had a $60m loan and fired its CEO in September after he went missing with the company’s cash.Or the sorry tale of Sinosteel ...