China's top arranger sees more bonds as cure for debt hangover

Shanghai

CHINA'S top underwriter said that regulators will encourage more bond sales this year because cutting off financing is not the right solution to the nation's debt hangover.

As the slowing economy cuts earnings, companies increasingly need fresh note offerings to pay off old obligations, according to China Securities Co, the top arranger of bond offerings from state-owned and listed firms. It forecasts that issuance of corporate notes will jump at least 30 per cent in 2016 to top 10 trillion yuan (S$2.2 trillion), more than the annual economic output of Spain.