HALISTER1: BNP Says Investors Should Exit Wanda Bonds on Lack of Clarity

BNP Says Investors Should Exit Wanda Bonds on Lack of Clarity

(Bloomberg) -- BNP Paribas says situation surrounding Wanda group has become a “black box, where no outsider has any advantage looking in” given lack of information on Chinese government’s intent and actions to company.
  • “We have a categorical distaste for black-box trades, and would exit the bonds to those who are more willing in this regard,” Charles Chang, head of Asia credit strategy at BNP Paribas, wrote in a note
  • Bonds and shares of Wanda group companies fell Monday after reports its billionaire Chairman Wang Jianlin and his family were stopped leaving the country. The company denied the reports, calling them “groundless” 
  • Past stories of chairmen at Chinese companies going missing have been untrue or had a limited impact on the firms involved. BNP expects a similar outcome in Wanda’s case
    • Bondholders who are willing to wait out the outcome can hold, but should be ready to accept a “3pt-10pt volatility range”
  • Earlier stories:
    • Wanda Is Said to Face Crackdown, Checking Hollywood Ambitions
    • China Said to Examine Deals Gone Awry to Gauge Banking Risks
To contact the reporters on this story: Carrie Hong in Hong Kong at chong61@bloomberg.net; Annie Lee in Hong Kong at olee42@bloomberg.net To contact the editors responsible for this story: Neha D'silva at ndsilva1@bloomberg.net Finbarr Flynn

Alert: HALISTER1
Source: BFW (Bloomberg First Word)

Tickers
3699 HK (Dalian Wanda Commercial Properties Co Ltd)

People
Ann Lee (BNP Paribas SA)
Charles Chang (BNP Paribas SA)
Wang Jianlin (Dalian Wanda Group Co Ltd)

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