Chinese management firm Cinda Asset Management is offering bonds worth at least $500m to boost funding in anticipation of a surge in bad loans with slowing economic growth.
According to Reuters, the fund managers of Cinda, in a company presentation, reportedly said that Cinda Asset Management is offering bonds for the first time in the denomination of US dollars, worth $500m.
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The issue is to cope up with the anticipated increase in the bad loans, if the Chinese economy slowed down.
Cinda is one of the four bad debt managers in China, set up by the Chinese government before the last decade, and is also the most successful bad debt manager.
But, the last three year trend shows that there is a decline in its asset quality as economy slows. It is also struggling to maintain profit growth as the corporate debts are increasing and the government allows more companies to default.
This negative trend in the last three years has investors worried.
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By GlobalDataWith regard to the funds requirement, the company is meeting investors in Hong Kong, Singapore and New York this week.
