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China Huarong’s dollar bonds rose by ~1 point across the curve after reporting that it bought a 5% stake in Citic Ltd for HKD 13.6bn ($1.7bn) at HKD 9.35 ($1.2) per share. This was a 29% premium to its closing price on Wednesday. Huarong said that the purchase would bring in “longterm stable financial returns”. This comes about two years after Citic had helped bailout Huarong after the latter reported a massive $15.9bn loss for 2020. The move by Huarong “is good for market sentiment and from a technical perspective… It could enable onshore investors to invest in Huarong under Citic Group line”, said Ting Meng, a senior credit strategist at ANZ Banking Group.
Huarong’s 4.25% 2027s move higher to 86 cents on the dollar, yielding 8.5%.
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