NDRC forces regulatory filing on red chips’ offshore issues

Author: Brian Yap | Published: 26 Apr 2017

PRC corporates struggling to cope with higher borrowing costs and regulatory curbs on real estate financing have turned to the offshore debt market for fundraising, but with such an influx comes with offshore default concerns.

Some market participants are worried about the growing trend involving red-chip holding companies listed offshore with assets parked onshore in mainland China, where the parent has issued a lot of debt offshore. They question whether, in the case of an offshore default by any of these parent companies, it may be problematic if and when they seek to channel onshore funds out of the country to be used to repay offshore debt. Hong Kong-listed PRC residential developer China Evergrande Group issued a dual-tranche $1.5 billion US dollar-denominated high yield bond and a single-tranche $1 billion high-yield dollar paper within one day of each other in March.

"It remains a big question mark as to...



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