BlackRock Loan Default in China Tests Asia Private Credit Market

BlackRock is attempting to recover funds tied to a defaulted private credit loan in China, in a case that could test perceptions of Asia as a relatively safer market for private credit investments, Trista Xinyi Luo and Kari Lindberg reported for Bloomberg News.

BlackRock is reportedly seeking to enforce a personal guarantee from Metcold founder and CEO Henry Ha. (Photo: Metcold)

A unit of Chinese cold-chain logistics company Metcold defaulted in April on a $27.5 million portion of a BlackRock loan, according to people familiar with the matter.

The investment firm is reportedly seeking to enforce a personal guarantee from Metcold founder and CEO Henry Ha.

The default marks the first known troubled loan in BlackRock’s Asia Pacific Private Credit Opportunities Fund II, drawing attention within Asia’s growing private credit market.

Although BlackRock reportedly holds collateral tied to the loan, Bloomberg said the firm does not have claims on the operating companies that own the underlying physical assets.

Metcold disputed aspects of the report, saying some details were inaccurate or incomplete.

Industry observers say Asia’s private credit sector is often viewed as more conservative than its U.S. counterpart because lenders in developing markets tend to apply stricter underwriting standards.

Neeraj Seth, chief investment officer at 3R Investment Management, said Asian lending practices are generally “more disciplined” due to weaker legal frameworks in parts of the region.

The case comes as investors closely monitor risks in the global private credit market, which has grown rapidly in recent years.