China debt offering fails to sell out: report

HONG KONG (MarketWatch)
An auction Monday of Chinese local government debt backed by the Ministry of Finance failed to attract bidders for some of the 50 billion yuan ($7.73 billion) on offer, according to Dow Jones Newswires.
The result marked the first time a MOF auction of local government debt had failed to sell out since such auctions began in 2009, the report said.
Investors were reportedly skittish after Moody's Investors Service said last week local government debt posed an increased risk to China's banking system, the report said, citing Shanghai traders.
Moody's also said a National Audit Office estimate of bank lending to local governments and their vehicles underestimated the true figure by 3.5 trillion yuan.
The MOF sold 23.94 billion yuan of three-year bonds on behalf of 11 local governments at 3.94%, against planned issuance of 25 billion yuan, according to the report.
The remaining debt on auction received sufficient bids.