China Huarong to sell $3.64b of bonds to buy more distressed assets

100 Yuan notes are seen in this illustration picture in Beijing November 5, 2013. REUTERS/Jason Lee/Files

China Huarong Asset Management Co, the country’s biggest manager of bad debts, said on Tuesday it will sell up to 25 billion yuan ($3.64 billion) of bonds in the next week to replenish capital and fund the purchase of distressed assets.

The fundraising comes as Beijing accelerates efforts to reduce leverage as the number of defaults by both private and state companies has surged against the backdrop of a slowing economy.

Huarong, one of four state-owned asset management companies (AMCs) set up in 1999 to dispose of state lenders’ bad debts, will raise 12.5 billion via three-year financial bonds, and another 12.5 billion via five-year bonds, the company said in a statement on Shanghai Clearing House’s website.

The bonds will be issued on China‘s interbank market between Nov. 18 and Nov. 22. Terms will be decided based on the bidding.

At the end of June, non-performing loans (NPLs) at Chinese commercial lenders totaled 1.44 trillion yuan, the highest in 11 years.

The urgency of dealing with rising NPLs has not only increased the capital needs of companies such as Huarong, but also prodded Beijing to encourage the creation of more managers to handle bad loan.

In addition to the four national AMCs, there are also provincial ones. State media reported last month that China‘s banking regulator relaxed rules to allow provincial governments to set up two instead of one.

Also read:

China Huarong raises $2.3b in Hong Kong IPO

China Huarong IPO seeks $2.8b; boost seen from Cinda share surge

Reuters

Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.

Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.