China's debt binge spawns asset-backed bond boom

Hong Kong

BANKS are bundling loans into securities to make room on their balance sheets for more lending amid a fading property boom and stuttering economic growth. This isn't the US circa 2007, it's China in 2015.

Having banned asset-backed bonds in 2009 after they'd helped spark the global financial crisis, authorities in the world's second-largest economy started allowing sales in 2012. Issuance has climbed since then to 282.3 billion yuan (S$61 billion) last year, almost 15 times the offerings in 2013, according to data compiled by Bloomberg. Sales are already up 147 per cent this year versus the same period in 2014.