(Yicai Global) March 22 -- Chinese companies have postponed or cancelled the issuance of 905 credit bonds in the 12 months to March 19, 43.4 percent more than in the previous year, as regulators raise the bar following a number of high-profile defaults last year, Xinhua’s Economic Information Daily reported today.

Some CNY344.6 billion (USD52.9 billion) in new bonds failed to be issued in the year to March 19, an annual increase of 38.3 percent, the report said, citing Wind statistics.

"The bond market is under greater pressure this year," an industry insider said. "Bond defaults continue and institutions are less enthusiastic about credit bonds, with some low-grade ones even going unheeded."

A number of Chinese firms, including Jiangsu Zhongnan Construction, Nantong Automobile Transportation Group and Chongqing Yu Kang Asset Management which have credit ratings of AA+ or AAA, have aborted their plans or failed to sell bonds.

China’s bond market was thrown into turmoil last year with several delinquencies by state-owned enterprises, notably Yongcheng Coal and Electricity, Qinghai Salt Lake Industry and Brilliance Auto, sending the prices of some bond types into free fall as investors’ faith in the creditworthiness of China’s once unassailable SOEs falters.

Those responsible for reviewing financing applications must use stricter standards to rigorously check issuers with weak qualifications, such as their corporate governance, debt basket and debt repayment credit, the Shanghai Stock Exchange said recently. While those responsible for risk monitoring and regulation must severely crack down on financial fraud and intentional defaults, it added.

Editor: Kim Taylor