Yunnan Provincial Investment Holdings’ dollar bonds fell sharply yesterday with Nomura warning of contagion risk among SOEs in the Chinese province as per Bloomberg. Fitch had initially downgraded the company in January to BBB- on the back of government injecting assets into the company and potential dilution of firm’s control over key assets. Last week, Fitch affirmed and withdrew the ratings –  the outlook was negative prior to withdrawal citing commercial reasons for the latter. An analyst at Nomura, Clayre Guo said that withdrawal by Fitch “likely portends a shutdown of offshore financing channels.” Yunnan Energy’s dollar bonds guaranteed by Yunnan Provincial fell yesterday – USD 4.5% Perps fell 10.5 cents to 82.5 cents a dollar yesterday and their Bi Hai’s USD 6.25% 2022s guaranteed by Yunnan Provincial have fallen 16 cents to 75 in the last two days

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