The unexpected default prompted concern over the health of coal firms and their lenders, as well as the broader SOE market in general, triggering a selloff in bonds issued by weaker borrowers from the sector and prompting some of them to cancel debt sales.
The news reverberated across China, immediately setting off a chain reaction affecting other coal mining companies and local government financing vehicles in other provinces. Traded coal bonds plunged, with Jizhong Energy Resources's 5.4% 2021 notes falling 7% to 87 yuan, a record low, while Pingdingshan Tianan Coal Mining’s 5.07% 2023 bond was last trading at 79, just off all time lows.
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