China to improve mechanism to deal with bond defaults as delinquencies rise - Shanghai Sec News

SHANGHAI, Dec 25 (Reuters) - China will improve the mechanism to deal with bond defaults, as the number of corporate delinquencies rise, the official Shanghai Securities News reported on Wednesday.

China’s central bank, securities watchdog and the state planning commission will soon publish rules that will regulate the disposal of corporate bond defaults, the newspaper said.

Authorities will also publish guidelines for trustee business and creditor meetings, according to the report.

In 2020, China will step up monitoring credit risks, stabilize market expectations, and crack down on the practice of dodging repayment obligations, the newspaper reported, citing Zou Lan, a senior official of the People’s Bank of China.

Default rate among China’s private issuers of bonds have climbed to a record high of 4.9% during the first 11 months of the year, and could face similar pressure in 2020, according to rating agency Fitch. (Reporting by Samuel Shen and Brenda Goh; Editing by Himani Sarkar)