China Construction Bank (CCB) will provide loans to Baoding Tianwei Group Co Ltd, supporting the company in paying its bond interest which it had defaulted on Tuesday, news portal caixin.com reported Saturday.

Analysts said CCB's move is disappointing since the market had been expecting that Tianwei's bond default would be another milestone in breaking "rigid repayment," in which the government implicitly guarantees debt repayment, in China's bond market.

There have been several bond defaults in the bond market, but the issuers were all private enterprises.

Tianwei, as a local State-owned enterprise based in Baoding, North China's Hebei Province, is wholly owned by China South Industries Group Corporation (CSGC) - an enterprise owned by China's central government.

Tianwei issued five-year bonds in April 2011 with an issuing amount of 1.5 billion yuan ($242.25 million), media reports said.

When the interest payment was due on Tuesday, Tianwei announced that the company was unable to pay the interest of 85.5 million yuan and the company then became the first State-owned enterprise to have a bond default in China's bond market.

The CCB is both the bond underwriter for Tianwei and the bond holder, and the aid arrangement is under the coordination of the People's Bank of China (PBC), according to the caixin.com report.

"CCB agreed to provide a bank loan in order to reduce its own losses caused by the default," She Minhua, an analyst of Beijing-based Zhong De Securities, told the Global Times Sunday.

"It is within my expectation that the government would provide aid to Tianwei due to its State-owned background, which enabled Tianwei to [get aid after] high-level coordination from the PBC," he noted.

The government is still not willing to see a bond default from a State-owned enterprise, according to She.

It is more natural for CCB to provide aid rather than Tianwei's parent company CSGC, because investors are more inclined to blame CCB -which is the bond underwriter - and require CCB to assume the responsibility, " Qian Qimin, co-director of Research Institute of Shenwan Hongyuan Securities, told the Global Times on Sunday.

Although Tianwei may go through the interest payment crisis with CCB's help, it is highly possible that Tianwei's bond holders may demand payment in advance and the company will need to pay a total of 1.5 billion yuan, an anonymous insider said, according to caixin.com report.

If that development happens, it is hard to tell if CCB would still continue to help, the insider said.

Tianwei's 2014 earnings report showed that the company has a total debt of 20.95 billion yuan while its assets are worth 12.91 billion yuan, according to the report.

"It is of great importance to break the 'rigid repayment' in China's bond market so bond investors will take bond issuers' actual management and debt repayment ability into consideration," Qian said.

"It is possible that there will be more default cases in China's bond market due to the economic downturn and the government's permission within certain limits," he noted.