Tianwei says it will not default on its July bond payment

In a filing with the Shanghai Stock Exchange, Chinese electrical equipment and solar module producer Baoding Tianwei Baobian Electric Co. confirmed it will make a bond payment on its 5.75% 2018 notes in July. According to Bloomberg, China’s third-largest brokerage Guotai Junan Securities Co. has expressed concerns about Tianwei’s financial situation and has warned that the company may struggle to repay other debts.
»The problem with the company is that it has a huge amount of short-term borrowings,« Yang Kun, a bond analyst in Shanghai at Guotai Junan, told Bloomberg. »It’s likely the company may have problems rolling over the debt,« he said, referring to the loans. The Tianwei group has at least $4.3 billion of notes and loans coming due by the end of 2018, according to Bloomberg.
Scrutiny of China’s debt market has intensified since Chinese PV module producer Shanghai Chaori Solar Energy Science & Technology Co. failed to make an 89.8 million CNY ($14.6 million) bond interest payment on Mar. 7. The default, the first in China’s public bond market, showed that the Chinese government has moved away from its practice of bailing out companies with bad debt. Some analysts believe the default will lead to a substantial decline in risk appetite in China.

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