Huarong and HNA: two credits, one mirror image

Are bond investors failing to heed HNA’s lessons by taking a sanguine view about Huarong’s financial woes?
Lai Xiaomin
Lai Xiaomin

It has so far been a tale of two credits for Huarong and HNA, two Chinese borrowers which are being forced to slash their asset bases to avoid a liquidity crunch.

At one end of the trading spectrum is HNA, the airline turned global conglomerate whose offshore bonds are trading at highly distressed levels in the run up to two pivotal redemptions in November and December.

At the other end is China Huarong Asset Management, the country’s largest financial asset manager, whose dollar-denominated bonds are still trading close to its peer group, despite mounting evidence of the same cashflow problems afflicting HNA, including...

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