China LGFV Dollar Bond Sales Persist

The video discusses the recent surge in dollar issuances by Local Government Financing Vehicles (LGFVs) in China, highlighting specific deals from Shandong, Hunan, and Guangxi provinces. Despite concerns from ratings agencies about increasing off-balance sheet debt, investors remain confident, as no bond defaults have occurred in the sector. The video also covers recent NEO default cases, which were resolved with government intervention, raising questions about moral hazard. It concludes with a discussion on foreign investor trust in Beijing's support and the differing actions of local governments to protect their GDP and FX reserves.

Which provinces were mentioned as having recent LGFV deals?

• Jiangsu, Zhejiang, Fujian

• Shandong, Hunan, Guangxi

• Beijing, Shanghai, Guangdong

• Sichuan, Yunnan, Tibet

What is the main concern of rating agencies regarding LGFVs?

• High interest rates

• Off-balance sheet debt

• Lack of investor interest

• Currency fluctuations

What has been the trend in bond defaults among LGFVs?

• Fluctuating unpredictably

• Decreasing steadily

• Increasing rapidly

• No defaults reported

Why do local governments support LGFVs according to the video?

• To protect local GDP and currency reserves

• To reduce unemployment rates

• To comply with central government directives

• To increase foreign investments

What is the general sentiment of Chinese investors towards LGFVs?

• Strongly negative

• Indifferent

• Cautiously optimistic

• Highly skeptical