Bond defaults predicted to rise in 2017 in China
Chinese bond defaults are likely to rise in 2017, with over CNY5.5tn ($792bn) coming due for onshore issuers. Despite the recovery of coal prices in China, many coal producers are suffering from high debt burdens, weak demand for coal and over-leverage in their balance sheets. Several large coal enterprises are experiencing liquidity problems, with 89 bond defaults recorded in 2016 in China, over double the amount of 2015. The Sichuan Coal Industry Group, for example, underwent a second default in 2016 on the principal and interest of CNY1bn in three-year private placement notes due in late December.

The latest repayment failure comes as analysts predict a surge in mainland defaults next year as 5.5 trillion yuan of onshore bonds come due