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China Huarong bonds jump on capital restructuring plan

SHANGHAI, Aug 19 (Reuters) - Prices of bonds issued by China Huarong Asset Management Co Ltd’s subsidiaries jumped on Thursday, after the troubled bad loan company announced a capital restructuring plan.

Huarong, which has not yet published its 2020 annual report, warned investors of an annual loss of 102.9 billion yuan ($15.85 billion) late on Wednesday, and said a state consortium led by the CITIC Group Corp had agreed to make a strategic investment in the company.

Despite the profit warning, Huarong said its liquidity was ample and could repay the outstanding offshore debts in time, boosting its bond prices.

A dollar-denominated perpetual bond issued by China Huarong International, a Huarong unit, jumped nearly 30% to $77.13 on a face value of $100, from $59.95 in the previous session, according to data provider Duration Finance. About a dozen other Huarong International bonds rose more than 10%.

In Shanghai, a Huarong Securities Co bond maturing in April, 2023 jumped 5%, according to exchange data.

$1 = 6.4919 Chinese yuan renminbi Reporting by SHANGHAI NEWSROOM; Editing by Rashmi Aich

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