15.67 billion in domestic bonds fully redeemed early! AVIC Finance breaks the debt crisis, AVIC Trust's risk mitigation path remains unclear.

A bond issue totaling RMB 15.67 billion in outstanding, continuing bonds under Aviation Industry Corporation of China Finance & Leasing? Holding Co., Ltd. (hereinafter referred to as “AVIC Industry & Finance”) was suspended late at night, and the reason has been revealed.

On the afternoon of April 7, AVIC Industry & Finance released a board resolution announcement, proposing to convene a bondholders’ meeting to make an early redemption of all outstanding publicly issued bonds and debt financing instruments (collectively referred to as “bonds”) and to remove them from the listing/forfeit the registration of all of them. The early redemption price would be the bond par value plus accrued interest up to the redemption date.

The announcement disclosed that the bondholders’ meeting for this round is scheduled for April 14. Thirteen corporate bonds and two medium-term notes under the company plan to resume trading from April 8.

On April 1, AVIC Industry & Finance released a bond suspension announcement, requesting that 15 outstanding bonds under the company (total outstanding amount of RMB 15.67 billion) be suspended from April 2. The reason for the suspension was “the company intends to plan a major matter related to the corporate bonds.”

Multiple people interviewed by the reporter from Jiemian News reported that although the bondholders’ meeting has not yet been held, bondholder voting in favor of early redemption is likely to happen.

For bondholders, this early redemption is a clearly positive development. One interviewee said that if investors enter the relevant bonds in the secondary market at a discount, the redemption at par value plus accrued interest could yield about 20% returns.

A fixed-income person at a brokerage firm in Shanghai told Jiemian News that, judging from public transaction and position structure, the main institutional holdings of AVIC Industry & Finance-related bonds have dropped significantly. Public funds and other institutions such as non-bank financial institutions had already reduced or liquidated their positions through discounted trades well before the 2025 period when the company delisted, information disclosure was interrupted, and rating constraints were imposed. The entities that continue to hold positions now are mainly private fund products, high-yield accounts, and structured funds.

“Funds of this type generally bet on central SOE credit. After bond prices fell into the RMB 70–85 per 100-yuan range, they entered in batches. As of the suspension of trading at the start of April, the yield and valuation had already fully reflected liquidity pressure, missing financial statements, and structural risks. Early redemption is more like the realization of risk pricing.” The interviewee added.

AVIC Industry & Finance’s move is not without precedent and may not have been entirely unexpected.

On March 27, 2025, AVIC Industry & Finance—then still the main listed company entity of the Shanghai market—also abruptly announced a suspension late at night to plan a major matter, and the very next day it announced a resolution to voluntarily terminate its listing.

As the only financial holding platform under Aviation Industry Corporation of China (hereinafter referred to as “AVIC Group”), AVIC Industry & Finance was listed on the Shanghai Stock Exchange’s main board in August 2012. It was once the first A-share listed company of the financial holding type. Its controlled financial subsidiaries include AVIC Leasing, AVIC Trust, AVIC Securities, AVIC Finance, AVIC Futures, AVIC Rongfu, Aviation Investment, AVIC Capital International, and others.

Among them, AVIC Leasing is the group’s main source of revenue. AVIC Trust was also once a core asset under AVIC Industry & Finance; however, due to having heavily invested in real-estate trust business in earlier years, during the industry downturn cycle it saw a large number of project defaults and a high concentration of overdue products, causing revenues to shrink sharply and making it the subsidiary with the most significant performance decline. Before AVIC Industry & Finance delisted, AVIC Trust was already placed under custody due to redemption risk of trust products, and it is still in a risk resolution phase.

Wind data shows that after AVIC Industry & Finance’s A-share delisting announcement was released, AVIC Industry & Finance-related bonds in the secondary market experienced concentrated dumping. Transaction prices quickly fell from near par value to the RMB 70–80 range, and some low-liquidity bonds even saw a larger decline.

Wind data also shows that since April 2025, AVIC Industry & Finance has, as scheduled, redeemed the principal of domestic bonds maturing in full of RMB 11.6 billion and paid interest of RMB 725 million. Currently, the remaining domestic bonds outstanding still total RMB 15.67B. The amount maturing in 2026 is about RMB 7.86 billion. June, September, November, and December are the redemption peaks.

A reporter from Jiemian News noted that throughout 2025, AVIC Industry & Finance’s risk-resolution actions have never stopped.

In addition to continuously recovering cash by transferring equity interests of subsidiaries and sub-subsidiaries, on the evening of December 31, 2025, AVIC Industry & Finance announced the appointment of a new chairman and three senior executives. The new management team all has a background in the Aviation Industry Group. At the Aviation Industry Group’s 2026 annual work meeting, AVIC Industry & Finance’s newly appointed Party Secretary and Chairman Luo Jide also clearly stated that risk resolution would be placed at the core position,提出 “continuously tackling the three major tasks of anchoring the main business, risk resolution, and transformation-driven development,” and emphasized “making every effort to hold the bottom line of preventing systemic financial risks.”

Possibly boosted by the above series of actions, the market’s overall outlook for AVIC Industry & Finance’s redemption prospects has been cautiously optimistic, and recently multiple brokerages have issued related research viewpoints.

For example, 广发证券 said that the book value of the equity interests in the financial subsidiaries held by AVIC Industry & Finance can fully cover bond repayment. Among the financial subsidiaries, AVIC Leasing has the largest contribution to revenue and operations are stable. From a perspective of sustainable operations, AVIC Leasing provides important support for the overall operational stability of AVIC Industry & Finance. From an asset realization perspective, the company can still obtain a large amount of cash flow by transferring equity, thereby supporting bond repayment.

After completing the early redemption of domestic bonds, the follow-up risk resolution of AVIC Trust still remains a major focus. Jiemian News noted that since the April 2025 placement under custody took effect, the market has had ongoing discussions about its resolution path.

Since 2020, AVIC Trust, along with the industry, entered an adjustment period. At the end of 2023, AVIC Trust’s own credit-risk assets were RMB 18.0 billion, of which the watchlist category accounted for 17.86%, and the non-performing rate was 3.33%. AVIC Industry & Finance’s 2024 interim report shows that AVIC Trust is involved in multiple contract disputes related to real estate.

In terms of equity structure, AVIC Industry & Finance directly holds 73.56% of the equity of AVIC Holding. AVIC Holding in turn holds 84.42% of AVIC Trust’s equity. As a result, AVIC Industry & Finance has indirect control over AVIC Trust, with a stake ratio of 62.10%.

CICC previously统计 that the risk-resolution measures for Huarong Trust mainly include having trust insurance fund take over and disposing of diversified assets. China Huarong has continued to divest financial license-type subsidiaries and was absorbed in a merger. The risk-resolution progress of Rongsheng Trust mainly includes entrusting management to leading trust institutions, with the controlling shareholder becoming a non-public enterprise. For other trust risk-resolution schemes, a reference is to adopt a combination of equity restructuring and tiered redemption, with the original controlling shareholder basically exiting the trust business.

Therefore, CICC believes that this time AVIC Trust has its own difficulty in resolving issues, as well as uncertainty factors in shareholders’ business planning and the macro environment. Yet the equity background advantage is clear. The disposal方案 may still reflect a strong policy-guided attribute: it is likely to take problem-asset disposition and realization under shareholder leadership, while gradually compressing or exiting the trust business. AVIC Industry & Finance focuses on healthy main businesses with a higher degree of linkage to the group’s main business.

Guangfa Securities also said that from historical experience, resources behind central SOEs are relatively abundant and policy constraints are stronger. After risks are exposed, they often can obtain stronger external resource support and stronger risk-resolution efforts.

Based on historical experience, from concentrated risk exposure to reorganization plans being implemented and the market’s expectations being repaired, Huarong took more than one year to complete the relevant work, and valuations also turned at the same time. Overall, the repair took 14 months. If extrapolated linearly, AVIC Industry & Finance may still need to go through a period of valuation consolidation and a necessary risk-resolution window period.