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Guosen Securities' Hong Kong unit denies bond default reports

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Guosen Securities' Hong Kong unit denies bond default reports

GuosenSecurities Co. Ltd. unit Guosen Securities (Hong Kong) FinancialHoldings Co. clarified that no event of default occurred on its 1.2 billionyuan of bonds, in contrast to earlier reports, Bloomberg News reported March 31.

Guosen Securities (Overseas) Co., which issued the bonds inHong Kong in 2014, said that the keepwell deed — a pledge of guarantee from theparent company on the bonds — on the securities continues to be in full effect.

Reports of a possible default came after Bank of New YorkMellon's Hong Kong branch, the trustee of the offering, received a notice fromthe issuer that the keepwell deed was neither in full force or in effect, whichshould constitute an event of default. A representative from the bank has sinceclarified that Guosen Securities corrected the notice.

The bonds are due 2017.

As of April 1, US$1was equivalent to 6.48 Chinese yuan.