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Rare Guarantees on HNA Dollar Bonds Give Solace to Investors

  • At least four HNA bonds offer onshore guarantees, data show
  • Investors will be more comfortable with guarantees: ANZ
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Debt-laden Chinese conglomerate HNA Group Co. has given its creditors cause for concern in recent months, but its international bondholders are finding some comfort in guarantees provided by the local parent company.

The structure means that overseas investors would in theory have a direct claim against the Chinese-based entity in the event of any default or bankruptcy proceeding. While there’s no indication that such events are in the offing, scrutiny of such protections has increased after the group’s units missed payments to several Chinese banks and yields on some of its units’ notes traded at times in recent months at levels considered distressed.