The growing risk of default by Shanghai Chaori Solar Energy Science & Technology Co. may become China’s “Bear Stearns moment,” prompting investors to reassess credit risks as they did after the U.S. securities firm was rescued in 2008, according to Bank of America Corp.
Four companies pulled domestic bond sales and yields on speculative-grade debt jumped the most since November after Shanghai Chaori Energy Science & Technology Co. warned of what would be China’s first onshore default.
Shanghai Chaori Solar Energy Science & Technology Co. said it may not be able to make an 89.8 million yuan ($14.6 million) interest payment in full on March 7, in what would be the first default of an onshore bond.
China Galaxy Securities Co. plans to sell shares in Shanghai in what could be the nation’s biggest first-time stock offering this year after regulators ended a more than yearlong freeze on new listings.
China’s stocks fell, sending the benchmark index to its biggest loss in seven weeks, amid speculation that reduced lending to the property industry will curb growth in the world’s second-largest economy.