Chinese firms turn to short debts as offshore issuance tightened: Bloomberg

China is tightening approval for offshore financing, with the review period for bonds and loan quotas of one year or more extended to four to six months, about twice as long as before, Bloomberg reported.

According to Bloomberg, some companies are turning to short-term debt that requires no regulatory sign-off to raise urgent funds, as US$100 billion (HK$780 billion) of offshore bonds are due this year.

The National Development and Reform Commission(NDRC) has stepped up its oversight since late 2025, the report said, demanding more details on repayment plans and use of proceeds. In some cases, approvals have taken as long as nine months.

To avoid offshore debt defaults, many Chinese firms have shifted to short-term bonds with maturities of less than 12 months, which do not require NDRC approval, Bloomberg reported. The agency further noted that data show Chinese firms have raised at least US$2.3 billion from such short-term offshore bonds so far this year, a record high for the period.

The tighter rules also show Beijing is stepping up efforts to curb debt growth at weaker companies and the local government financing vehicles (LGFVs), according to Bloomberg. 

However, the report mentioned some stronger borrowers or companies in state-back sectors are still able to secure approval for offshore bond sales in about three months.

Refinancing pressure is expected to rise further next year, when maturities are forecast to reach US$131 billion, Bloomberg reported.

Effie ZHANG

 

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