Local debt market in disarray as govts back off guarantees

Two local governments have withdrawn support for bond sales by their financing vehicles in the space of a week, throwing the market into disarray.

Changzhou Tianning Construction Development Co in Jiangsu province said last week that it would not go ahead with a 1.2 billion yuan ($194 million) planned offering after city authorities said they would not support the debt.

Tianning district's finance bureau said that it would not categorize the notes as government debt, reversing a position outlined just a day earlier.