China Sees Bankruptcies Surge; Bondholders May Get Less Back

China’s effort to cut the burden of insolvent companies weighing on its slowing economy has kicked into higher gear, with a slew of bankruptcy filings that’s set to enrich the case history of debt resolutions for bond investors.

Local courts have accepted or plan to accept at least five bankruptcy applications from firms that defaulted on publicly issued bonds since early November. That’s roughly on par with the number seen over the previous four years. The new pace may continue: China’s top planning body called on Dec. 4 for local officials to clean up the debt of firms with excess production capacity or insolvent balance sheets by 2020.