China Boosts Support for Private Companies’ Bond Sales as Economy Falters

Chinese authorities are stepping up efforts to help private companies raise financing as bond investors become increasingly wary of buying corporate debt amid slowing economic growth, disruption caused by Covid-19 lockdowns, and rising default risks.

The country’s interbank bond market regulator on Tuesday announced the launch of a bond financing support tool for privately owned enterprises, known as the CSIPB, which offers a series of credit protection instruments — financial derivatives such as credit risk mitigation warrants, credit-linked notes and credit enhancement guarantees — that will compensate bondholders in the event of a default.