Huarong Bonds Lose Half Their Value in Key China Funding Market
- Borrowers get 40% of note’s value in cash versus 91% in April
- As a quasi-sovereign issuer, its debt is likely widely pledged
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China’s repo market shows just how risky China Huarong Asset Management Co.’s bonds are perceived to be within the mainland, despite being majority-owned by the finance ministry.
Borrowers putting up a Huarong Securities 2023 bond for collateral now get just 40% of the note’s face value as cash, down from 91% at the start of April, according to China Securities Depository and Clearing Corp. data.