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China Junk Bond Arranger Predicts More Chapter 15 Bankruptcies

  • More Chinese developers could file for schemes of arrangement
  • Debt restructuring accounts for about half of Haitong revenue

A top arranger for Chinese junk dollar bonds says that a type of filing under the US bankruptcy code will play an important role for China’s distressed developers to restructure debt, buying them time to pay back creditors until markets recover. 

About 10 Chinese real estate companies could use so-called schemes of arrangement to restructure debt in a holistic fashion this year, Chen Yi, head of global capital markets at Haitong International Securities Group Ltd., said in an interview. As part of the process they could use Chapter 15 filings to bind the terms in the US, preventing creditors from suing them there.