December 20, 2017 / 8:44 AM / 3 months ago

HNA's Tianjin Airlines cancels $152 mln bond issue, citing 'market fluctuations'

SHANGHAI, Dec 20 (Reuters) - Tianjin Airlines, a subsidiary of China’s HNA Group, has cancelled a planned 1 billion yuan ($151.90 million) bond issuance, citing “market fluctuations”.

This comes amid growing concerns that the acquisitive HNA conglomerate is experiencing repayment troubles.

“Due to recent market fluctuations, the company has decided to cancel this issuance of short-term bills,” it said late on Tuesday, in statement posted on the China Foreign Exchange Trading System’s website, which is managed by the central bank.

Tianjin Airlines had planned to issue 270-day securities in the onshore market by Dec. 18 and use the proceeds to repay two bonds maturing in January and February, according to a prospectus published on Dec. 13.

The company did not respond to further questions from Reuters about the bond cancellation.

HNA’s $50 billion worth of deal-making in the past two years has sparked intense scrutiny of its opaque ownership and use of leverage. In June, the Chinese government told major banks to review their credit exposure to HNA and a handful of other non-state companies, putting pressure on its finances.

The group’s subsidiaries have issued 5 billion yuan ($755 million) in domestic commercial paper over the last month, all yielding around 7 percent - a level considered high by analysts.

Last week, China Citic Bank Corp said that HNA Group was “experiencing temporary liquidity difficulties”, including difficulty repaying a commercial acceptance bill pledged by Hainan Airlines Holding Co , the conglomerate’s flagship carrier.

HNA said in its response that its cooperation with Citic Bank was “fully normal” and denied that the group was facing any temporary liquidity difficulties or that there was any repayment delays. ($1 = 6.5831 Chinese yuan) (Reporting by Brenda Goh; Editing by Subhranshu Sahu)

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