Investors Abandon Trusts for Private Equity Due to Default Risk

Chinese investors are moving away from trusts as defaults become a greater concern. The article discusses the high profile SOE defaults covered in the global financial press as a reason for the shift. This isn't systemic risk, but it does show these defaults you're seeing in the global financial media are already having an impact on the entire financial system.

Wholly owned subsidiary of a national party card securities Securities 2.05 billion yuan of trust scheme can not be exposed overdue payment conditions, coupled with debt after the debt crisis in the steel, so that the risk of trust products honor more and more in public view.

...On the other hand, the advantages of rigid payment trust and other financial products is being broken. Since October this year, there are a number of companies are caught in debt crisis. Yingli announcement that fails to send in full payment of principal and interest due in the vote, Nanjing Yurun release payment risk warning, Hebei melt cast breach caused bloodshed. The China Steel Corp. issued a five-year period "10 Steel debt," sell-back period has to, but deep debt crisis and Steel shares already Huitianfali; preceding national securities violations, according to its holding company Founder Securities announced, National Securities 2.05 billion yuan in its first principal payment of 350 million yuan, the investment direction of a single light Stone Capital Trust scheme Shares of working capital loans in the October 21 final repayment date, appeared unable to pay overdue The situation, the company has 2.05 billion yuan in respect of the matter reported to the police department. Coupled with the first half of this year "ST Hunan, Hubei debt" and "12 Rich 01" payment crisis, which from time to time be exposed to trust payment risk events, display a rigid payment trust wealth management products unspoken rules have been broken.
Quanjing: 兑付风险频现 信托资金向私募基金转移

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