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Huarong Gets Nod To Raise $11bn In Bonds In Interbank Market

The bonds will be used to help buy and dispose of non-performing assets, plus other businesses such as bond-to-equity swaps, China’s banking regulator said


Equity funds
China's Shanghai Composite index has gained just 3.45% this year, and is the fourth worst performer among Asian stock markets this year. Photo: Reuters

 

China Huarong Asset Management has been given approval to raise 70 billion yuan ($11 billion) of financial bonds in the interbank market, as it continues to improve its credit profile and re-focus on its main bad loan business.

The bonds will be used to purchase, dispose non-performing assets and for other main businesses such as bond-to-equity swaps, the China Banking and Insurance Regulatory Commission (CBIRC) said in a statement on its website on Tuesday.

The company, one of four debt collectors created by China’s finance ministry in 1999 to process bad loans made by the country’s biggest banks, had missed a March 31 deadline for filing its 2020 earnings, sparking a rout in its dollar-denominated bonds that spread to other Chinese issuers.

The bonds jumped back in August after it revealed a state-backed rescue plan, in which a consortium led by the state-owned Citic Group Corp had agreed to make a strategic investment in it.

The company has also announced plans to sell stakes in a distressed asset exchange unit, consumer finance unit and the securities unit, amid a regulatory push to sell non-core assets as part of its business revamp.

 

  • Reuters with additional editing by Jim Pollard

 

 

 

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Jim Pollard

Jim Pollard is an Australian journalist based in Thailand since 1999. He worked for News Ltd papers in Sydney, Perth, London and Melbourne before travelling through SE Asia in the late 90s. He was a senior editor at The Nation for 17+ years and has a family in Bangkok.

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