China Offshore Defaults Rise to Record While Local Delinquencies Drop
- Missed payments have set yearly record high for offshore notes
- Firms have used extensions to help avoid onshore delinquencies
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A divergence in stress levels between China’s offshore and local credit markets is widening, as defaults on overseas notes hit a record even as calm reigns onshore.
Overseas payment failures have amounted to a record 85% of all Chinese bond defaults so far this year, as measured by the issuance amount, according to data compiled by Bloomberg. In contrast, onshore delinquencies, which had dominated the scene until last year, are at the lowest since 2018 when the data series began.