Hedge funds have made quick profits on debt tied to HNA Group, even as the airlines-to-hotels conglomerate has scaled back internationally and fallen behind on other obligations.
By Frances Yoon and Stella Yifan Xie Aug. 25, 2019 5:30 am ET Hedge funds have made quick profits on debt tied to HNA Group Co., even as the Chinese airlines-to-hotels conglomerate has scaled back internationally and fallen behind on other obligations.
In recent months, HNA has missed some yuan-bond payments, rattling investors. A Hong Kong-listed unit fell behind on loan repayments. HNA delayed paying some wages, a person familiar with the matter said. And several investors say an HNA-linked financing platform in China has failed to meet obligations on high-yielding investments known as wealth-management products.
Ron Thompson, a restructuring expert at Alvarez & Marsal, said HNA’s stance initially “appears to defy corporate-finance logic,” since onshore creditors typically have stronger claims. But he said in this case, the government could persuade onshore creditors to hold off. David Yu, a Shanghai-based finance professor and aviation expert, said Beijing might have an incentive to keep groups like HNA afloat to help prevent wider market instability.
Since last year, representatives of China Development Bank Corp., a major creditor and one of China’s largest state-owned lenders, has been helping HNA manage its finances. Another portfolio manager said he had bought bonds that were due earlier this month at less than 90% of face value. The bonds then rebounded as investors reassessed the likelihood of a default, and the total $300 million of debt was paid off in full and on time.
México Últimas Noticias, México Titulares
Similar News:También puedes leer noticias similares a ésta que hemos recopilado de otras fuentes de noticias.
GOLDMAN SACHS: These are the 12 stocks most loved by hedge fundsThe firm's 'Hedge Fund VIP List' consists of the stocks that appear most frequently in hedge funds' top 10 holdings each quarter.
Leer más »
Hedge funds aren’t betting on a recession, Goldman data showHedge fund investors don’t buy the idea that the U.S. economy is headed for a recession in the near term, according to data from Goldman Sachs
Leer más »
GOLDMAN SACHS: These are the 12 stocks most loved by hedge fundsThe firm's 'Hedge Fund VIP List' consists of the stocks that appear most frequently in hedge funds' top 10 holdings each quarter.
Leer más »
Hedge funds aren’t betting on a recession, Goldman data showHedge fund investors don’t buy the idea that the U.S. economy is headed for a recession in the near term, according to data from Goldman Sachs
Leer más »
Why China’s assault on Cathay Pacific should scare all foreign firmsChina can get its way in corporate boardrooms but hurts itself with its pressure tactics
Leer más »