The 21st Century Business Herald reported that 96 businesses suffered credit defaults for a total valuation of 66.8 billion yuan (US$ 9.7 billion) in the first six months of 2019, a 263 percent increase from the same period in 2018.
Some analysts think this is the continuation of the credit default wave outburst from the second half of last year, which reached 100 billion yuan in that period.
CITIC Securities analyst Lv Pin warned about the increasing risk of credit defaults in the coming months, since companies are facing more difficulties in getting new money to pay back their debts. “The speed of credit defaults in the second half of this year may increase for the following reasons: First, the market is re-assessing (downgrading) the credit rating of many institutions. Second, the market is tightening the requirements for securing properties when issuing loans to companies that have a low credit rating. Third, the special ways of issuing bonds in the past may no longer continue, which will make bond issuance harder.”
Source: 21st Century Business Herald, July 2
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