China Huarong Asset Management has been given approval to raise 70 billion yuan ($11 billion) of financial bonds in the interbank market, as it continues to improve its credit profile and re-focus on its main bad loan business.
The bonds will be used to purchase, dispose non-performing assets and for other main businesses such as bond-to-equity swaps, the China Banking and Insurance Regulatory Commission (CBIRC) said in a statement on its website on Tuesday.
The company, one of four debt collectors created by China’s finance ministry in 1999 to process bad loans made by the country’s biggest banks, had missed a March 31 deadline for filing its 2020 earnings, sparking a rout in its dollar-denominated bonds that spread to other Chinese issuers.
The bonds jumped back in August after it revealed a state-backed rescue plan, in which a consortium led by the state-owned Citic Group Corp had agreed to make a strategic investment in it.
The company has also announced plans to sell stakes in a distressed asset exchange unit, consumer finance unit and the securities unit, amid a regulatory push to sell non-core assets as part of its business revamp.
- Reuters with additional editing by Jim Pollard
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