Chinese Bank Skips Early Capital Bond Payment in Rare Move

A small Chinese lender made a rare decision to skip early redemption on its local tier-two bond, sparking fresh concern on the country’s smaller lenders as non-performing loans rise amid an economic slowdown, Bloomberg News reported. Guangdong Nanyue Bank Co, based in the coastal province in Southeast China, said it won’t exercise an early redemption on its 1.5 billion yuan ($215 million) 6% tier-two bond next month, according to a filing on Thursday on the China Bond website. It didn’t give a reason for its move. The 10-year note, sold in 2014, gives the issuer the right to redeem the bond in full at the end of the fifth year, according to its bond prospectus. Calls to the bank went unanswered. Read more

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