China Makes Big Move In Debt-To-Equity SWAPs

Debt-to-equity SWAPs in debt-ridden China are flourishing to unprecedented levels, a Natixis report shows, one of several reports on the topic. While the system for exchanging debt for equity is running at “full speed,” there remain issues, namely “it is not perfect,” the report opined, but it could be just shifting the risks.

Dramatic growth in Chinese debt-to-equity SWAPs

There has been a decided shift in China. The unelected regime at one point decried western-style SWAPs and excessive bank leverage – both financial and political. That attitude changed and gained momentum after the 2008 financial crisis, and China has engaged in various forms of financial engineering

For debt to equity SWAPs, the...