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China Huarong Asset Management Co. had its much-delayed AGM on Thursday where it received shareholder approval for the following special resolutions:

  • Issue the remaining RMB 10bn ($1.6bn) of its capital bond quota
  • Allow the board a mandate to issue up to 20% of its outstanding shares
  • Sell a 72% stake in its securities unit
  • Raise up to RMB 70bn ($10.9bn) via bonds issued on China’s interbank market
This comes about two months after the state-owned distressed-debt asset manager received an RMB 50bn ($7.7bn) bailout package led by Citic Group following months of uncertainty after the company failed to publish its annual earnings for 2020 in March. Around the time of the bailout announcement, Huarong released an annual loss warning of $15.9bn vs. a profit of $220mn in 2019. The losses were largely attributed to impairment losses. Before the bailout announcement, its dollar bonds fell to 50-60 cents on the dollar in May. The bonds swiftly recovered post the bailout announcement with most bonds trading at ~95 levels currently. However, details of the bailout have not been released so far.

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