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Bankruptcy case casts doubt on US$96 billion of offshore Chinese bonds claims, puts pressure on financial products skirting capital controls
The business arm of China’s most prestigious university met its creditors on April 30, and the outcome has shaken investors’ faith in widely used contracts for Chinese offshore bonds. The bankrupt Peking University Founder Group used a short cut known as a keepwell deed to borrow US dollars from foreign investors. Now, its state-appointed restructuring administrator has thrown doubt on the enforceability of these contracts by classifying them as pending recognition. This decision impacts bondholders of about 16 per cent, or US$96 billion, of outstanding offshore bonds issued by Chinese companies, according to ... (full story)