Chinese nickel giant Tsingshan Holdings has reportedly secured loan packages from various lenders – including J.P. Morgan – preventing the immediate realization of losses that total billions of dollars.
Tsingshan Holdings has secured loan packages from various lenders, according to a «Bloomberg» report citing unnamed sources, following a record short squeeze that saw nickel prices more than double in hours earlier this week.
The creditors involved include both local and intentional banks, including J.P. Morgan and China Construction Bank (CCB) – the latter lender’s international global markets unit acted as one of Tsingshan’s brokers which reportedly failed to pay hundreds of millions in a margin call on Monday before settling the London Metal Exchange (LME) gave it more time to settle the payment on Tuesday.
Credit Terms
According to the report, the meeting between Tsingshan and the lenders ran from Tuesday to early Wednesday.
In addition to J.P. Morgan and CCB, Chinese authorities directed Tsingshan’s domestic banks to offer more credit lines to the firm with the majority to be used for margin calls on existing positions on the LME. Tsingshan founder Xiang Guangda also told bankers at the meetings that he is confident in repayment, adding that he is reviewing his hedging strategy and mulling an exit from betting against nickel.
This marks a potentially timely lifeline after the surge in nickel prices caused Tsingshan to shoulder paper losses of up to $8 billion, according to Chinese media reports.
