China Huarong International repays US$300m debt

An offshore arm of Chinese bad debt giant China Huarong Asset Management repaid a maturing dollar bond on time on Thursday, after concerns over its ability to service debts prompted a sell-off of its bonds last month, Reuters reports.

The repayment of principal and interest on a maturing US$300 million 3.3 percent bond by China Huarong International Holdings, announced on its parent’s official WeChat account, had been widely expected.

But doubts about the parent firm’s financial situation and its ongoing restructuring plans continue to nag investors, who are concerned about potential losses and what they would mean for assumptions of government backing of major Chinese state-owned enterprises.

Huarong Securities Co, an onshore subsidiary of China Huarong Asset Management, said in a statement on Wednesday that its operations were normal and it had ample funds to repay interest and principal on its outstanding bonds, after its 2 billion yuan (US$310.57 million) 4.65 percent October 2023 exchange-traded bond exhibited “unusual fluctuations” in its price in the past week.

Investors dumped Huarong’s dollar bonds in April amid uncertainty about its ability to repay them after the company delayed the release of its annual results at the end of March, citing the need to finalise a “relevant transaction.”

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