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Developers Scrambling, But Overall Default Pressure to Ease in 2022

China’s total onshore corporate bond defaults rose to 220 billion yuan ($34.6 billion) in 2021, another record high. The number would have been even larger if the political calendar had not intervened, with the Party’s 100th anniversary reducing credit events in Q2 2021. Property developers continued to lead overall defaults, and private defaulters continued to outpace state-owned firms. Developers are still under significant financial pressure early in the year given the decline in property sales, rising maturing debts, and ongoing refinancing difficulties. However, lower interest rates should improve the onshore refinancing environment for most corporates in 2022.

Posted February 9, 2022
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