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More Local Government Bond Issuances May Make Corporate Fundraising Harder

A securities business is seen in Jinhua, Zhejiang province, on Wednesday. Photo: VCG
A securities business is seen in Jinhua, Zhejiang province, on Wednesday. Photo: VCG

The issuance of local government bonds increased for at least the third straight month in May, market data showed, fueling concerns that the boom may siphon funds available for investment in corporate debt and worsen the already tight credit environment for companies.

A total 355.3 billion yuan ($55.5 billion) in local government bonds was issued in May, the third consecutive month that the figure has risen from the previous month, according to data provider iFin. January’s figure was unavailable. But bond offerings in that month are usually low because local governments have yet to finalize their annual budgets.

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