(Yicai Global) Aug. 25 -- State-owned China Railway Materials Co., one of the country's largest railway materials, steel and mineral traders, has repaid CNY6.8 billion (USD1 billion) worth of its bonds on time, ending a four-month long debt crisis and restoring investor confidence in the creditworthiness of state-owned enterprises.
China Railway had been hit by the declining steel trade, suffering losses for years. In April the company suspended trading in nine outstanding bond instruments worth CNY16.8 billion (USD2.5 billion), provoking an uproar in the markets. The move triggered concerns over debts issued by centrally-governed SOEs and prompted its supervisory body, the State-Owned Assets Supervision and Administration Commission of the State Council, to take action.
The Beijing-based firm was urged to raise funds through a series of measures such as bringing in a third-party to manage the debt and making good use of its assets.
China watchdogs have stepped in to ensure that there has been no new bond default by a central SOE this year. So far, all of the bonds issued by central SOEs that have defaulted or were about to default have been repaid, except for those issued by Sinosteel Corp. and Baoding Tianwei Group Co., which are being dealt with.
The SASAC has said it will monitor all bonds due to expire in the next three months, give advance warnings in a timely manner and take measures to prevent bond defaults and safeguard financial market stability.