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"The ripple effects [of a default by government backed investment companies funding urban construction projects in Kunming] would be too big," according to a credit expert cited by Yicai, who claims that Kunming will not allow these LGFVs to default.
yicaiglobal.com
"The ripple effects [of a default by government backed investment companies funding urban construction projects in Kunming] would be too big," according to a credit expert cited by Yicai, who claims that Kunming will not allow these LGFVs to default.
yicaiglobal.com
2/3
"If there was a large-scale repayment failure on such bonds, it would greatly impact the banking industry and the entire credit system, and therefore investors would no longer dare to buy credit bonds without collateral."
"If there was a large-scale repayment failure on such bonds, it would greatly impact the banking industry and the entire credit system, and therefore investors would no longer dare to buy credit bonds without collateral."
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He may be right, but he is also effectively arguing that these borrowers will not be allowed to default not because they have the resources to continue servicing their debts but rather because a default would be too painful to accept.
He may be right, but he is also effectively arguing that these borrowers will not be allowed to default not because they have the resources to continue servicing their debts but rather because a default would be too painful to accept.
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