China's 'Big Five' to Set Up Debt Swap Subsidiaries

(Beijing) — China's "Big Five" state-owned commercial banks plan to set up their own asset management subsidiaries to deal with debt-for-equity swaps, a move that is part of the central government's broader effort to decrease companies' financial leverage.

The five largest state-owned commercial banks plan to each establish a subsidiary with their own respective funds of about 10 billion yuan ($1.5 billion) to execute debt-for-equity swaps for debt-ridden companies, bank sources told Caixin.