China Admits First Official Local-Government Loan Default

–  China Admits First Official Local-Government Loan Default (ZeroHedge, July 1, 2014):

There has been a growing number of defaults since China first broke its non-payment cherry earlier this year. Names like Chaori Solar have “promised” to pay back the money they owe, only to falter on that promise mere months after a temporary reprieve. Wide-scale panic has for now been avoided by liquidity provision to banks (not shadow-banks) and mini-stimulus which many assumed was targeted at keeping the state-owned enterprises (SOEs) alive no matter what. That ‘hope’ all changed this weekend… As Bloomberg reports, Qilu Bank’s annual report shows that Licheng district urban construction development company has not paid its loan interest…”To the best of our knowledge, this is the first official disclosure of a LGFV default on a bank loan.”

 

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