Cinda plans to securitize US$604 million in bad loans

Cinda Asset Management plans to securitize US$604 million of Bank of China's bad loans, reports the Financial Times. Cinda is a state-owned firm that specializes in handling bad debts from China's big banks. According to Cinda, the deal's success will set the course for similar product deals in future.

Cinda's securities have a five-year maturity period. The company, which was established by the Chinese government in 1999, has announced plans to purchase part of the securities in the future. However, as a relatively new process in China, asset securitization will require increased monitoring from Chinese regulators.