Cover Story: How SOE Default Wave Shows State Bailouts Are Over

By Wang Juanjuan, Wu Hongyuran, Zhang Yuzhe and Denise Jia

The government’s position is that Henan Energy is going down and there’s nothing the government can do, a person close to the Henan government says.

“This might be a historic credit crisis,” a debt investor told Caixin, referring to a recent series of bond defaults by state-owned enterprises (SOEs).

The bond market veteran’s employer holds AAA-rated bonds of two state-owned defaulters in the crisis: Brilliance Auto Group Holdings Co., a Shenyang-based automaker with links to BMW AG, and Yongcheng Coal and Electricity Holding Group Co. Ltd., a major coal mining company in Henan province.

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