Shanxi steps in to avert Huatong bond default

China avoided its second domestic bond default on Wednesday, as a local government stepped in with cash at the last minute.

Huatong Road & Bridge Group Co Ltd, a Shanxi-based private construction company, came up with the money to repay 400 million yuan in principal ($65 million) and 29.2 million yuan in interest on bonds it issued last year.

On July 16, the company said in a statement that it was unsure whether it could make the payment, after its chairman had been taken away by the police.