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Bond Market News

Huarong Issues $2.8bn H1 Loss Warning on Property Sector Worries

China Huarong said that it expects a net loss of RMB 18.9bn ($2.8bn) in H1 2022 after credit impairment losses “increased significantly”. The asset manager said that the impact of capital market volatility and the “downturn in the real estate market” were adding to its profitability woes. Huarong said it would do its best to reduce its risk and ease its burden on real estate projects amid its warning. The company has been in the process of selling its non-core assets ever since its $6.6bn government bailout and ownership change last year. Separately, Huarong said that it plans to transfer a 76.8% stake in Huarong Trust to China Trust Protection Fund for RMB 6.15bn ($910mn). As per Bloomberg, this transaction combined with the sale of four other financial units including Huarong Securities Co. should see China Huarong receiving RMB 30.5bn ($4.5bn).

Huarong’s dollar bonds were trading stable – its 4.25% Perp was at 80 cents on the dollar, yielding 12.15%.

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