CHINA Huarong Asset Management Corp., one of the nation’s four bad loan managers, is marketing U.S. dollar bonds as souring debts surge and borrowing costs fall to a more than 16-month low.

    A unit of China Huarong is offering three-year notes at a spread of about 245 basis points more than Treasuries and five-year securities at around 260 basis points, a source familiar with the matter said.

    Average yields for Chinese dollar-denominated bonds fell to 5.36 percent July 8, the least since February last year, JP Morgan Chase & Co. indices show.

    Companies in China are selling record amounts of debt even as economic growth slows to the least in more than a decade.

    Corporate debt in Asia’s biggest economy surpassed that in the United States in December, Standard & Poor’s said in a report last month, ballooning to US$14.2 trillion versus US$13.1 trillion.

    Nonperforming loans jumped the most since 2005 in the first quarter and State-owned asset management companies like China Huarong are raising funds to help clean up lenders’ balance sheets.

    China Cinda Asset Management Co., the nation’s biggest bad loans manager, sold US$1.5 billion in dollar bonds May 7. Its US$1 billion of 4 percent notes due 2019, issued at a 250-basis-points spread, are now trading at a 220-basis-points premium. (SD-Agencies)