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China Bad Debt Prices Up 30% as New Gold Rush Gets Under Way

  • Too many buyers are grabbing a limited supply of NPLs: Belos
  • Bain Capital, PAG bought bad loan portfolios in recent weeks
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Non-Performing Loans Are China's New Gold Rush

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Bad loans are rapidly becoming the latest hot commodity in China as more domestic and foreign investors rush into the market and bid up prices.

Non-performing loan prices have risen more than 30 percent this year, according to distressed investor Belos Capital Asia Ltd. The average selling price of NPLs has climbed to around 50 cents on the dollar in the past two years, from 30 cents, said Victor Jong, a partner in the deals and business recovery services unit of PricewaterhouseCoopers LLP in Shanghai. Such a high level is “very rare” in international markets, Jong said.