HNA pays Rmb1bn bond principal after missing Friday deadline
Latest sign of liquidity strain despite asset sales
Chinese finance-to-aviation conglomerate HNA on Monday paid the Rmb1bn ($147m) principal on a bond after missing the payment on Friday due to what it said was a glitch in the interbank transfer system.
The payment of the bond principal averts the closest call yet for HNA, which delayed or extended debt during a liquidity crisis in the fourth quarter of 2017. It has since sold about $18bn in assets, according to company statements and data from Thomson Reuters.
The 270-day bond that came due on Friday was issued during HNA’s tense period last year. On Friday, HNA did manage to pay the Rmb54m in interest due, thus averting an official default.
The bond was issued by Haikou Meilan International Airport Co, HNA’s home airport on the sub-tropical island of Hainan. “Meilan airport operations are stable,” Everbright Securities analyst Zhang Xu wrote over the weekend. The delayed principal payment “is probably the result of the pressure of repaying short-term debts and the mismatch between liquid and illiquid assets, leading to a strain on liquidity.”