China slowdown puts energy firms under pressure
More defaults loom as sector needs to repay 200b yuan of debt this quarter
Hong Kong
CHINA is cleaning up its act, and that hasn't been a good thing for energy bonds.
Faced with the weakest economic growth in more than two decades, companies from Baoding Tianwei Yingli New Energy Resources Co in renewables to Yaojie Coal & Electricity Group Co in fossil fuels are under pressure. Haitong Securities Co is warning of more defaults as the industry needs to repay a record 200 billion yuan (S$44.1 billion) of debt this quarter. Downgrades of energy notes accounted for 20 per cent of all local rating cuts this year.
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