Debt restructuring report drags down China Huarong dollar bondsBusiness | 20 Apr 2021 7:06 pm
China Huarong Asset Management's dollar bonds sank Tuesday after Reorg Research reported regulators are considering options for the company that include restructuring the debt of its offshore unit, Bloomberg reports.
A debt restructuring is one of several options under discussion and a decision is far from finalized, according to the report, which cited people familiar with the matter. Reorg is a New York-based provider of credit data and analytics. Almost all of China Huarong’s US$22 billion in dollar bonds are issued or guaranteed by China Huarong International Holdings, the offshore unit.
A representative for Huarong couldn’t immediately be reached for comment when contacted by Bloomberg.
The company’s 5.5 percent bond maturing in 2025 fell 9.4 US cents to 78 US cents on the dollar as of 6:10 p.m. in Hong Kong, Bloomberg-compiled prices show. A 4.5 percent perpetual note slumped 6.6 US cents to 72.4 US cents.
The declines follow a three-day rally in the firm’s dollar bonds that accelerated Friday after China’s financial regulator said that the bad-debt manager was operating normally and had ample liquidity. The statement, made after a regular briefing in Beijing, were the first official comments since the company jolted Asian credit markets by missing a deadline to report preliminary earnings on March 31.
“There’s very little clarity from China Huarong and regulators over the fate of offshore investors so the bonds are still vulnerable to big swings,” said Owen Gallimore, head of credit strategy at Australia & New Zealand Banking Group in Singapore.