China slowdown puts energy firms under pressure

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.