Funds provided by state-owned giant Industrial & Commercial Bank of China helped Huarong make its latest offshore bond payment as the troubled bad debt manager continues to face restructuring risks.
ICBC’s Singapore branch gave Huarong a loan to repay a S$600 million bond which was due on April 27, according to a «Bloomberg» report citing unnamed sources.
Support from the world’s largest lender came after China's financial regulator requested banks to extend loans to Huarong by at least six months to help refinance debt, the report added.
State Support… For Now
ICBC’s reported loan follows previous reports of assurances from the regulator of the payment due on April 27 and a deep credit rating cut by Fitch.
Still, Huarong’s near-term outlook remains uncertain with another $20 billion in outstanding offshore bonds including $3.7 billion due this year.
Potential options being considered include the offloading of unprofitable non-core businesses, an asset shift of over 100 billion yuan ($15.5 billion) to a central bank unit and transferral of ownership from the majority shareholder, Ministry of Finance, to a unit of China’s sovereign wealth fund.
