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China Bank to Turn $1.6 Billion of Bad Debt Into Securities

  • Agricultural Bank to sell securities backed by sour loans
  • Pimco analyst questions appetite for large-scale sales
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Agricultural Bank of China Ltd. is planning China’s largest sale so far under a trial program for lenders to offload bad loans by packaging them up as asset-backed securities.

The lender plans to sell securities backed by 10.7 billion yuan ($1.6 billion) of nonperforming loans on the interbank bond market, it said July 22 on the Chinese bond clearing house website.