CCB sets up debt-to-equity swap to reduce Yunnan Tin's leverage

China Construction Bank Corp signed a nearly 5-billion-yuan ($742 million) investment agreement on a market-driven debt-for-equity swap program with Yunnan Tin Group Co Ltd on Sunday, to help the company reduce its leverage.

The 5-billion-yuan investment is part of a two-phase, five-year debt-for-equity swap program with an expected rate of return ranging from 5 percent to 15 percent. Altogether, the bank will raise social capital worth a total of 10 billion yuan for the program.

Currently, the total assets of Yunnan Tin Group exceed 50 billion yuan, and the total liabilities are 35 billion yuan. Zhang Tao, chairman of the group, said the swap aims to help the Chinese tin producer and exporter out of its present cyclical financial difficulties.