THE authorities have stepped in to help a State-owned steel trader facing a bond deadline this week, according to sources familiar with the matter.

    The National Development and Reform Commission (NDRC), China’s top economic planner, will hold a meeting with investors in government-controlled Sinosteel Co.’s 2 billion yuan (US$315 million) in 2017 securities who have an option to sell them back Tuesday, the sources said.

    The NDRC will ask the investors not to do so, according to one of the sources. Parent Sinosteel Corp. sent a letter to noteholders pleading with them not to sell the bonds back as Sinosteel would be unable to repay, the sources said.

    The development comes after solar firm Baoding Tianwei Yingli New Energy Resources Co. missed payment on bonds Tuesday last week in the fifth onshore default this year, according to China International Capital Corp.

    “Investors may not be able to see the real credit risks in the bond market because of the aversions of defaults,” said Ji Weijie, a bond analyst at China Securities Co. in Beijing.

    “The NDRC’s intervention means Sinosteel may really avoid such a default. It’s reasonable for regulators to step in because the fall of a State-owned firm would have an impact on employment,” said Ji. (SD-Agencies)