Rumours of another government bailout in China's domestic bond market have heightened investors' nerves towards the struggling coal sector. Privately owned china kincho energy croup narrowly avoided a default on Rmb600m (US$91m) of medium-term notes due on January 18 after obtaining funding at the last minute. However, instead of reassuring investors that defaults will remain limited, the move sent credit spreads higher as analysts warned of further stress in the country's coal industry. yanzhou coal mining, China's fourth-largest coal producer with ratings of AAA from China Chengxin International Credit Rating and AA+ from China Bond Rating, last week cancelled an offering of Rmbl.5bn nine-month commercial paper, citing market volatility.
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