Bond defaults show bailouts over for China's state-owned enterprises

'Once the SOEs default their debt, it would turn the market upside down'

20201124 Caixin Brilliance AP_20325385648431

The defaults of Brilliance Auto and Yongcheng have triggered a corporate bond sell-off, piling 60 billion yuan ($9.15 billion) worth of losses onto investors, according to a brokerage estimate. © AP

WANG JUANJUAN, WU HONGYURAN, ZHANG YUZHE and DENISE JIA, Caixin

November 24, 2020 15:27 JST

"This might be a historic credit crisis," a debt investor told Caixin, referring to a recent series of bond defaults by state-owned enterprises (SOEs).

The bond market veteran's employer holds AAA-rated bonds of two state-owned defaulters in the crisis: Brilliance Auto Group Holdings Co., a Shenyang-based automaker with links to BMW AG, and Yongcheng Coal and Electricity Holding Group Co. Ltd., a major coal mining company in Henan province.