Lehman Brothers Holdings Inc., a top Wall Street firm, had closed a deal to buy bad loans with a face value of roughly US$240 million from a Chinese State-run asset manager, an executive said Monday.
The purchase from Huarong Asset Management Corp., which is selling 16 bad debt pools with a book value of US$2.2 billion, closed Friday, said Edwin Wong, a managing director in high yield for Lehman in Hong Kong.
On Dec. 12, Huarong said it had reached deals to sell the non-performing loan (NPL) portfolios to investors including Lehman, UBS, J.P. Morgan, Morgan Stanley, Goldman Sachs and Citigroup Inc.
Lehman declined to give a purchase price for the portfolio, which is a mixture of secured and unsecured assets from around the Beijing and Nanchang areas.
Foreign investors are looking to spend US$10 billion-US$15 billion on Chinese NPLs, according to a PricewaterhouseCoopers (PWC) poll.
?We?re very excited about the prospects in China,? following the limited supply in 2004, said Wong.
From December 2001 until the beginning of this month, only US$6 billion in bad loans had been sold to overseas players.
But executives are becoming more upbeat as the process becomes more standardized and the State-run asset management companies (AMCs) have a clearer mandate.
?We?re feeling pretty optimistic for 2005,? Wong said. ?I think there?s definitely more clarity around the AMCs.?
