China banks offer 25-year loans to LGFVs to avert credit crunch

(Image: China Construction Bank)

Wed, 05 Jul 2023

China’s biggest state banks are offering local government financing vehicles loans with ultra-long maturities and temporary interest relief to prevent a credit crunch amid growing tension in the US$9 trillion (NZ$15t) debt market, according to people familiar with the matter.Banks including Industrial & Commercial Bank of China (ICBC) and China Construction Bank have started to ramp up loans that mature in 25 years, instead of the prevailing 10-year tenor for most corporate lending, to qualified LGFVs with high creditworthiness in rec...

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