Chalco tests waters with new renminbi perpetual bond

It will test Investors' belief in state's support after a first default in China

Published Thu, Apr 3, 2014 · 10:00 PM
Share this article.

[SINGAPORE] Aluminum Corporation of China (Chalco) is considering a ground-breaking perpetual renminbi bond in a move that will test investors' belief in continued state support for the country's highly indebted state-owned companies.

The undated deal would be a first in the offshore renminbi market, but Chalco's third perpetual in the last 12 months. The struggling aluminum producer, China's largest, has already turned to the US dollar market twice in the last year to boost a balance sheet that shows short-term liabilities far exceeding its cash position.

While overseas investors snapped up those securities at relatively low yields, lured by Chalco's government backing, a new issue would test their belief in the state's support following an unprecedented default in China's domestic bond market last month.

BT is now on Telegram!

For daily updates on weekdays and specially selected content for the weekend. Subscribe to

Companies & Markets


Get the latest coverage and full access to all BT premium content.


Browse corporate subscription here