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Strategies & Market Trends : China Warehouse- More Than Crockery
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To: RealMuLan who wrote (1345)11/11/2003 12:31:03 PM
From: RealMuLan  Read Replies (1) of 6370
 
Citigroup Buys $1.8 Bln Bad Loans From Bk Of China
By Andrew Batson and Karen Richardson

HONG KONG (Dow Jones)--Citigroup Inc. (C) said it bought a $1.8 billion portfolio of nonperforming loans from Bank of China (Hong Kong) (BCH.YY) in an auction, increasing its exposure to distressed debt from Chinese state-owned banks.


"We are very pleased to have been selected for the transaction, and view favorably opportunities in this area in China and Hong Kong," said Joseph Draper, Citigroup's head of principal investing in Asia.

Bank of China's Hong Kong branches originally made the loans, mostly to local companies, in the 1990s. Most of the portfolio is backed by real estate such as rented retail space, much of it located in the crowded Mong Kok district of Hong Kong, according to people familiar with the debts.

Though many of the loans will be difficult to recover because they are backed by property with low resale or rental values, analysts said the portfolio is less risky than bad loans in mainland China. Hong Kong's thorough property-registration records and advanced legal system should enable Citigroup to more easily make money on the loans than if they were backed by mainland assets.

sg.biz.yahoo.com
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