China Dollar Bond Issuers Hit by Huarong Debt Concerns

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SHANGHAI, April 15 Reuters Chinese corporate dollar bond issuers are facing rising financing pressure after asset management giant China Huarong Asset Management Co delayed the release of its annual results, prompting broader concerns over issuers creditworthiness.

Investors are concerned that any debt restructuring by the company, which counts Chinas Ministry of Finance as its biggest shareholder, could leave holders of its U.S. dollar bonds unprotected and force an expensive reassessment of longstanding government support for Chinese stateowned issuers.

Huarong, a manager of nonperforming loans set up by the government two decades ago and one of Chinas four biggest asset management companies AMCs, has had its Hong Kong shares suspended since March 31 after it announced a delay in its earnings report due to a relevant transaction yet to be finalised.

Huarong Asset Management currently has outstanding dollar bonds worth 21.3 billion, according to research firm Gavekal.

The yield on a November 2021 medium term note issued by Huarongs subsidiarys Huarong Finance II Co was last quoted at 82.073, up from 1.729 a week ago.

The offshore bond price continues to slide as there are no rumours, or proposals, or anything about how to deal with Huarongs offshore debts, said a fund manager in Hong Kong.

Market concerns have spilled over into other issuers. The yield on a 800 million note issued by a subsidiary of China Great Wall Asset Management Co maturing on April 27 stood…

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