Guosen saga stirs keepwell debate

摘要

Bond investors shrugged off concerns over the use of keepwell deeds on Chinese financings last week after state-owned guosen securities cured a technical breach on a Rmb1.2bn (US$185m) Dim Sum bond. Guosen's capital injection into its Hong Kong unit, announced on April 1, followed a warning last month that the company had breached the terms of the bonds. The bonds recovered from 98.75 to 99.49 last week after the warning triggered a two-point loss. While lawyers said the saga proved offshore creditors could rely on the keepwell structure, the timing of the capital transfer and its modest HK$300m (US$39m) size raised questions over the ability of mainland issuers to transfer money overseas to service offshore obligations.