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Bond Market News
Hong Kong Court Rules in Favor of Creditors Regarding Keepwell Bonds
May 13, 2024
A Hong Kong court has ruled in favor of creditors in cases that involve keepwell provisions. Following this ruling, Peking University Founder Group is liable to the offshore units currently controlled by their liquidators working for creditors, for a sum of ~$1.7bn. The company had defaulted and entered into a restructuring in 2020, with creditors’ claims on bonds with keepwell provisions being rejected by the administrator. Last year, a high court judge had dismissed lawsuits that alleged Founder Group had breached keepwell deeds. The latest ruling comes as a result of appeals against the above. About 12% of Chinese dollar bonds outstanding were issued with keepwell provisions.
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