SHANGHAI, Nov 13 Reuters A Chinese miner that defaulted this week held an emergency creditors meeting on Friday to address potentially huge credit risks, as a series of defaults by toprated stateowned enterprises SOEs sent shockwaves through Chinas corporate bond market.
Investors have traditionally seen bonds issued by stateowned firms as less risky due to their perceived government backing. But the recent delinquencies triggered a selloff in debt issued by state firms in impoverished provinces, raising fears of a brewing credit crisis.
Once the credit environment is destroyed, its very difficult to rebuild confidence, wrote Qu Qing, an analyst at Jianghai Securities, highlighting a risk that investors will desert credit bonds for Chinese government bonds and policy bank bonds if the situation deteriorates.
The nervousness also spilled into the stock market, where Chinese banking shares fell over concerns they would face increased bad loans.
Executives from the state parent of mine operator Yongcheng Coal Electricity Holding Group Co met major creditor banks in Henan province on Friday.
Local officials from Chinas central bank and banking and state asset regulators were also present, according to a notice seen by Reuters and state media.
The meeting is taking place three days after the coal miner failed to make principal and interest payments on 1 billion yuan 151.02 million in commercial paper.
News of the meeting did little to ease investor concerns, as…