Offshore Bonds Make Up a Record Percentage of Chinese Defaults

Though Chinese issuers’ offshore bond defaults have slowed from last year’s record pace, they are making up an even-bigger portion of missed payments as borrowers focus on meeting domestic debt obligations.

All but 6% of public bond defaults by the country’s firms have been on offshore notes by issuance amount, a record according to data compiled by Bloomberg. Until last year, yuan notes dominated Chinese issuers’ delinquent bonds. But that switched as borrowers pushed to stay current with onshore debt, including by reaching deals to extend payments.

There have been defaults on 6.67 billion yuan ($943 million) of ...