Yangzijiang

Yangzijiang: announces secured term loan facilities for a 1-yr term US$100m loan, and 3-yr term US$50m. One condition requires Newyard Worldwide Holdings to pledge 372.8m shares (9.7% of shares out) as collateral. Newyard, which holds 1b shares in YZK, is owned by Chairman Ren Yuanlin. While it is commendable that Chairman Ren now has skin in the game, it is unusual to see non-company assets to be pledged as loan collateral for the company. Moreover, one wonders why YZJ did not instead tap on its balance sheet comprising Rmb 11.6b cash (or Rmb 1.8b net cash). YZJ shares closed +1% yday at $1.035.