We have carried out a
desktop analysis of 88
local government financing
vehicles in Anhui Province,
and found median indicative
issuer credit quality
to be slightly higher
than the national median
for LGFVs. Clear differences
exist between different
regions of Anhui when
it comes to indicative
capacity to support LGFVs.
Hefei, the provincial
capital, has higher indicative
support capabilities than
other regions of Anhui.
In some other parts of
the province, economic
development often leans
on a single resource or
company, which could impact
indicative capacity to
support LGFVs. Anhui’s
vehicles are primarily
engaged in traditional
LGFV areas of business.
The proportion of vehicles
engaged in public utilities
or commercial business
is relatively lower than
in other comparable provinces.
By referring to provinces
with similar debt burdens,
Anhui compares favorably
in terms of the number
and quality of listed
state-owned companies,
which provide it with
flexibility for resolving
hidden debt. Since most
of these assets are under
the jurisdiction of the
provincial government,
a coordinated response
from provincial authorities
could be a key factor
when considering Anhui’s
ability to resolve hidden debt.