According to sources cited by Bloomberg, China is tightening approval for corporate overseas borrowing, as approximately USD100 billion of corporate bonds are set to mature this year. The extended approval process requires companies to provide more details on repayments made before the end of last year and on the use of funds.
Authorities have reportedly extended the time required to approve bond and loan quotas with maturities of one year or longer to four to six months, roughly double the previous duration. In some cases, the approval process may even take up to nine months. To avoid defaults on offshore debt, Chinese enterprises have increasingly issued short-term bonds, making it more difficult to balance investment needs and cash flow. Some approvals may only be completed as late as one month before existing bonds mature, creating significant uncertainty for companies.
The report noted that the higher borrowing threshold in the mainland indicates that the central government is further curbing the rising debt of weaker companies and local government financing vehicles. In addition to increasing short-term offshore borrowing, companies have also turned to domestic banks that fall outside the jurisdiction of the National Development and Reform Commission for loans. (mn/da)
This article was automatically translated by AI, the Chinese version should be considered the authoritative version. AASTOCKS.com Limited does not guarantee its accuracy or completeness and accepts no liability for any damages or losses arising from the use of this translation.
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