Credit Bond Market New Defaults Hit Multi-Year Low; Private Firms Issue 270 Billion Yuan at 1.89%

Since 2026, only two new default entities have been added in the credit bond market, involving RMB 288 million, with the new default rate at its lowest level in years. During the same period, 12 bonds actually defaulted, with a total amount of RMB 14.329 billion, mainly involving entities with previously exposed risks. The implementation of accommodative monetary policy and local debt resolution measures has driven overall risk convergence, and risks in the local government financing vehicle (LGFV) and real estate sectors continue to ease.

In the first half of the year, private enterprises issued approximately RMB 270 billion in bonds, up nearly 30% year-on-year. The average issuance rate for three-year AAA-rated private medium-term notes was only 1.89%, indicating a significant improvement in the credit environment. However, repayment risks for weaker entities still exist, and local pressures warrant attention.