156.7 billion yuan in domestic bonds redeemed in full ahead of schedule! AVIC Finance breaks the debt crisis, and the risk-resolution path for AVIC Trust is yet to be confirmed.

Ask AI · How will AVIC Trust’s risk-resolution path affect market expectations?

Interface News reporter | Zou Wenrong

The reason behind the late-night suspension of trading of the 15.67 billion yuan (RMB) in outstanding bonds under Aviation Industry Group Finance Holding Co., Ltd. (hereinafter “AVIC Finance Holding”) has been revealed.

On the afternoon of April 7, AVIC Finance Holding issued an announcement of resolutions of the board of directors, proposing to convene a meeting of bondholders to redeem all outstanding publicly issued bonds and debt financing instruments (collectively referred to as “bonds”) ahead of schedule and to delist/cancel all of them. The early redemption price is the bond par value plus accrued interest up to the redemption date.

The announcement disclosed that the bondholders’ meeting will be held on April 14, and that its 13 corporate bonds and 2 medium-term notes are planned to resume trading starting April 8.

On April 1, AVIC Finance Holding released an announcement on the suspension of trading of its bonds, applying to suspend 15 of its outstanding bonds (with a total outstanding balance of 15.67 billion yuan) starting April 2. The reason for suspension was “the intention to plan major matters related to the company’s bonds.”

Photo source: DM Debt Check

Multiple interviewees told Interface News reporter that although the bondholders’ meeting has not yet been held, it is highly likely that the bondholders’ voting in favor of early redemption will happen.

For bondholders, this early redemption is a clear positive. One interviewee said that if the relevant bonds are entered in the secondary market at a discount, then the redemption according to par value + accrued interest can deliver roughly 20% returns.

A fixed-income person at a brokerage in Shanghai told Interface News reporter that judging from public executed trades and the holder composition, the main institutional holdings in bonds related to AVIC Finance Holding have already fallen significantly. Public funds and other institutions such as non-banks had, as early as the period when the company delisted in 2025, information disclosure was interrupted, and rating restrictions were imposed, completed the reduction or liquidation through discounted trades; at present, the entities that continue to hold are mainly private fund products, high-yield accounts, and structured funds.

“These funds generally bet on the credit of state-owned enterprises. After bond prices fell into the 70–85 yuan range, they entered in batches. As of early April, when the bonds suspended trading, their yield and valuation had already fully reflected liquidity pressure, missing financial statement information, and structural risks. Early redemption looks more like the execution of risk pricing.” The above interviewee added.

AVIC Finance Holding’s move is not without warning, and it also has precedent.

On March 27, 2025, AVIC Finance Holding—then an entity that was a listed company on the Shanghai Main Board—also issued a late-night surprise suspension announcement, proposing to plan major matters, and the next day it announced a resolution to voluntarily terminate its listing.

As the only financial holding platform under Aviation Industry Group Co., Ltd. (hereinafter “AVIC Group”), AVIC Finance Holding was listed on the Shanghai Stock Exchange’s Main Board in August 2012. It was once the first financial holding-type listed company in A-shares. Its controlling financial subsidiaries included 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 revenue source. AVIC Trust was also once a core asset under AVIC Finance Holding; however, due to its heavy early exposure to real-estate trust business, during the industry downcycle there were large numbers of project defaults and widespread concentrated payment delays for products, leading to a significant contraction in revenue and making it the subsidiary with the most prominent performance decline. Before AVIC Finance Holding exited the market, AVIC Trust was already put under custody due to repayment risk of trust products, and it is still in the risk-resolution stage.

Wind shows that after the delisting announcement for AVIC Finance Holding on A-shares was issued, related bonds in the secondary market faced concentrated sell-offs. The transaction prices quickly fell from near par value to the 70–80 yuan range, and some low-liquidity bonds even saw even larger drops.

Photo source: Guohai Securities research report

Wind shows that since April 2025, AVIC Finance Holding has, as scheduled, redeemed principal of matured domestic bonds totaling 11.6 billion yuan and interest of 725 million yuan; currently, the remaining stock of domestic bonds is still 15.67 billion yuan. The amount maturing in 2026 is about 7.86 billion yuan, with June, September, November, and December being the payment peaks.

Interface News reporter noted that since 2025, AVIC Finance Holding’s risk disposal actions have never stopped.

In addition to continuously replenishing funds by transferring equity in subsidiaries and sub-subsidiaries, on the evening of December 31, 2025, AVIC Finance Holding announced the appointment of a new chairman and three senior executives. All members of the new management have backgrounds at Aviation Industry Group. At the 2026 annual work meeting of AVIC Group, AVIC Finance Holding’s new Party Secretary and chairman, Luo Jide, also clearly stated that risk resolution will be placed at the core, proposing to “continue to tackle three major tasks—anchoring services to the core business, resolving risks, and transforming for development,” and emphasizing “fully ensure the bottom line so that systemic financial risks do not occur.”

Possibly boosted by the above series of actions, the market’s overall stance on AVIC Finance Holding’s redemption outlook is cautiously optimistic. In recent days, multiple securities firms have published related research viewpoints.

For example, Guangfa Securities said that the book value of the equity in the financial subsidiaries held by AVIC Finance Holding can fully cover bond repayment in full. Among the financial subsidiaries, AVIC Leasing contributes the largest share of revenue and operates steadily. From the perspective of sustainable operations, AVIC Leasing provides important support for the overall operating stability of AVIC Finance Holding. From the perspective of asset monetization, the company can still obtain substantial cash flow by transferring equity to support bond repayment.

After completing the early redemption of domestic bonds, concerns remain focused on the subsequent risk resolution of AVIC Trust. Interface News noted that since the custody arrangement took effect in April 2025, the market has continued to discuss its disposal path.

Since 2020, AVIC Trust has entered an adjustment period along with the industry. As of the end of 2023, AVIC Trust’s self-owned credit risk assets totaled 18 billion yuan, of which the watchlist category accounted for 17.86% and the non-performing rate was 3.33%. AVIC Finance Holding’s 2024 interim report shows that AVIC Trust is involved in multiple contract disputes related to real estate.

In terms of equity structure, AVIC Finance Holding directly holds 73.56% of the equity of AVIC Holding. AVIC Holding then holds 84.42% of AVIC Trust. As a result, AVIC Finance Holding indirectly controls AVIC Trust, with an interest of 62.10%.

Earlier, China International Capital Corporation (CICC) had statistics on that the main measures for risk resolution of China Huarong Trust include taking over by insurance protection funds and disposing of diversified assets. China Huarong has continued to divest financial license-type subsidiaries and has been absorbed through merger. The progress in risk resolution of China Merchants Trust mainly involves appointing entrusted management by leading trust companies, with the major shareholder becoming a non-public enterprise. For other trust risk-resolution options, one can generally refer to plans mainly based on restructuring equity and layered settlement of payments, under which the original controlling shareholder basically exits the trust business.

Therefore, CICC believes that this time AVIC Trust faces its own difficulties in self-resolution, uncertainties in shareholders’ business planning, and uncertainties in the macro environment. However, its equity background advantage is obvious. The disposal plan may still reflect a strong policy-guided attribute; it likely involves disposing and realizing problem assets under shareholder-led initiatives, while gradually shrinking or exiting the trust business, with AVIC Finance Holding focusing on healthy core businesses that have a higher linkage to the group’s main business.

Guangfa Securities also said that from historical experience, behind state-owned enterprises there tend to be relatively abundant resources and stronger policy constraints; after risks are exposed, they often can obtain stronger external resource support and risk-disposal intensity.

Based on historical experience, from concentrated risk exposure to the landing of a restructuring plan and achieving a market expectation repair, Huarong took more than a year to complete related work, and valuation also saw a turning point afterward. The overall repair took 14 months. If extrapolated linearly, AVIC Finance Holding may still need to go through a period of valuation digestion and the necessary risk-disposal window period.