China’s $1.7 trillion hangover

China’s $1.7 trillion hangover

Up to 40% of China’s $1.7 trillion LGFV loans are at high risk of default. What’s a panicking Beijing to do?

EuromoneyFXNews.com

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March 1996

Falling yields drive yankee issues


Think funding, think America. That's what many borrowers are doing as US interest rates sit at historical lows and investors roll out the welcome mat. And you don't have to be triple-A rated to join the bandwagon, as Norman Peagam explains.


A EUROMONEY SURVEY - MARCH 1996

Borrowers pile up the yankees

As US interest rates approach their lowest levels in more than two decades, foreign borrowers are queuing up to raise capital. American investors, for their part, are snapping up long-term bonds and bonds issued by lesser credits. The People's Republic of China $400 million yankee issue in January - $100 million for a stunning 100 years - has been the most dramatic demonstration of this convergence of interests to date. Public bond offerings by foreign issuers in the US are known as yankee bonds.

This type of issuance should continue in the near term, as most economists believe interest rates will remain low for the next several months - and should decline further if a budget compromise is reached in Washington - before perhaps beginning to rise as the November presidential election approaches. cs First Boston is advising clients to raise funds...


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