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Chinese Bank Skips Early Capital Bond Payment in Rare Move

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A small Chinese lender made a rare decision to skip early redemption on its local tier-two bond, sparking fresh concern on the country’s smaller lenders as non-performing loans rise amid an economic slowdown.

Guangdong Nanyue Bank Co, based in the coastal province in Southeast China, said it won’t exercise an early redemption on its 1.5 billion yuan ($215 million) 6% tier-two bond next month, according to a filing on Thursday on the China Bond website. It didn’t give a reason for its move.