China firms have found a way to cut debt, at least on paper

SHANGHAI: Under pressure to trim borrowings, China’s companies have found a way to reduce their lofty debt burdens – even if some of the risk remains.

Sales of perpetual notes – long-dated securities that can be listed as equity rather than debt on balance sheets given that in theory they could never mature – have soared to a record this year as Beijing zeros in on leverage and the threat it poses to the financial system.