China's HNA Group is issuing a high coupon, short-dated bond to global investors in a bid to refinance its debt. The move raises questions about the financial probity of Deutsche Bank's biggest shareholder.
HNA Group (HNA) is selling a 363-day bond at a coupon of about 9 percent, according to several media reports. The Chinese conglomerate is under pressure to refinance its debt-laden balance sheet after it splurged some $50 billion on high-profile acquisitions across the globe over the past two years, much of which has been debt-financed. HNA has $2.84 billion worth of bonds maturing before the end of 2018.
Dicey Investment Banking Deals
HNA, which includes aviation, real estate, financial services, tourism and logistics in its stable, only recently increased its stake in Germany's largest bank, Deutsche to 9.92 percent.
Chinese regulators have been trying to reign-in the flurry of overseas investments by their country's tycoons while major investment banks have also taken a step back from financing such transactions.
Private Banking Appetite
The latest bond offering, which pays an additional 25 cents to private banking investors as an incentive, has CCB International, China International Capital Corp, Citic CLSA Securities and Guotai Junan International as joint global coordinators.
Private banking investors were the biggest participants in the issue, accounting for 43 percent of the total, according to a «Reuters» report. Fund managers took 36 percent while banks and corporations accounted for 21 percent.
