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 $9 trillion debt market, reported Bloomberg News, citing people familiar with the matter.
Banks including Industrial & Commercial Bank of China Ltd. and China Construction Bank Corp. 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 recent months, said the report.