China’s Great Fire Sale looks set to take off. HNA Group Co., the indebted Chinese aviation-to-hotels conglomerate, told creditors it will seek to sell about 100 billion yuan ($16 billion) in assets in the first half of the year to repay debts and stave off a liquidity crunch, according to people familiar with the matter, who asked not to be identified because the discussions were private, Bloomberg News reported. Under the proposal, about 80 percent of that would be executed in the second quarter, according to the people.

ZZ Capital International Ltd., the private equity firm controlled by Chinese shadow-banking tycoon Xie Zhikun, is preparing to dramatically scale back its operations, according to people familiar with the matter. A number of senior executives at the Hong Kong-based fund, including at least two seasoned dealmakers brought in from global advisory firms, are currently negotiating severance packages, the people said, asking not to be identified because the discussions are private, Bloomberg News reported.

This might be the year China gets its first four-letter default. Or so says S&P Global Ratings, discussing the possibility that an LGFV, or local government financing vehicle, could finally go belly-up, Bloomberg News reported in a commentary. Why should global investors care? More than 95 percent of the $1 trillion asset class is yuan-denominated and trades onshore. The offshore portion is small, and showing little sign of distress. The coupon on a $500 million, three-year dollar bond recently issued by Central Plaza Development Ltd. was 3.875 percent.

China’s crackdown on shadow banking is raising concern among bond investors about local borrowers’ ability to make repayments as a record 1.8 trillion yuan ($285 billion) of notes come due this year, Bloomberg News reported. Regulators have stepped up efforts to patch loopholes in off-balance sheet financing in the last couple weeks, moves that will effectively block most fundraising channels for local borrowers. Concern that some local government financing vehicles may not be able to repay debt has helped push up the yield premiums on AAA rated LGFV notes to near the highest in three years.

China’s Communist leadership has tightened the regulatory screws on some of the nation’s largest, private-sector conglomerates in the name of financial stability, Bloomberg News reported. That’s made things a little less stable for investors in some of those companies’ securities. The effects have varied. Bondholders have generally been the worst hit, though stockholders in some of HNA Group Co.’s units have seen shares suspended from trading.

Strains are spreading in China’s $15 trillion shadow banking industry as investors pull back from the debt-like savings products that helped drive leverage to dangerous levels, Bloomberg News reported. Most affected are some $3.8 trillion of so-called trust products, until now the fastest-growing shadow banking segment and a popular way for debt-ridden property developers and local governments to raise funds from millions of ordinary Chinese.

Dalian Wanda Group has agreed to sell its interests in the high-profile London luxury development project, One Nine Elms, for 59 million pounds, the latest in a string of asset sales that underscore financial strains hitting the Chinese conglomerate, the International New York Times reported on a Reuters story. The conglomerate, which has businesses that range from real estate to football and cinemas, had initially said it wanted to transfer ownership of some its overseas assets to its holding company as part of a restructuring, keeping them within the group.

A unit of HNA Group Co. sought more time to complete the arrangement of a second bridge loan it took to finance a luxury real-estate development in Hong Kong as the Chinese conglomerate juggles its borrowings following a debt-fueled acquisition spree, Bloomberg News reported. Hong Kong International Investment Group Co. needs “extra time” and the loan has been extended for six months through July 15, it said in an emailed statement on Monday.

The world's three largest credit-ratings companies have a bit of catching up to do. Eight high-yield developers listed in Hong Kong should now be investment grade, according to Bloomberg's default risk model, which uses market inputs such as debt outstanding, interest expenses and operating cash flow to calculate the probability of firms reneging on their obligations in the year ahead, Bloomberg News reported in a commentary. Bloomberg's default risk model shows that companies from Country Garden to CIFI Holdings deserve an investment-grade ranking.

Units of HNA Group Co. missed payments due to several Chinese banks in recent weeks, prompting three lenders to freeze some of the borrowers’ unused credit lines, people with knowledge of the matter said. As of Jan. 4, four of the banks still hadn’t collected on principal and interest payments owed late last year, said the people, who spoke on condition the lenders not be named because of the sensitivity of the matter, Bloomberg News reported. They declined to name the units or provide any details on the size of the missed payments. China Citic Bank Corp.