(Bloomberg) — A selloff in China Huarong Asset Management Co.’s bonds is broadening to the nation’s other major bad-debt managers.

The yield spread on a China Cinda Asset Management Co. unit’s 3% dollar note due 2031 widened to 242 basis points over Treasuries on Tuesday, the highest since mid-April. A China Orient Asset Management Co. unit’s 2.75% bond due 2030 closed at 231 basis points that day, the widest spread since the note was issued in November.

Turmoil at Huarong since the company delayed its financial results two months ago has cast a shadow over the industry as investors await details of its restructuring and negotiations with the government.

China’s finance ministry is considering a proposal to transfer its shares in Huarong and the three other bad-debt managers to a new holding company modeled after the one that owns the government’s stakes in state-run banks, Bloomberg News reported on Tuesday.

“Due to the prolonged delay of Huarong’s 2020 results and increasingly complex restructure potential, investors are increasingly examining exposure to China AMCs,” said Dan Wang, an analyst at Bloomberg Intelligence.

Huarong’s dollar bond due 2025 is indicated at 70 cents on the dollar Wednesday, while its 4.5% perpetual is at 60 cents, Bloomberg-compiled prices show.

China Cinda, China Orient and China Great Wall Asset Management Co. have combined liabilities of 2.9 trillion yuan ($454 billion), including $28 billion of outstanding dollar bonds, according to their latest financial statements and data compiled by Bloomberg.

The four bad-debt managers were created in the aftermath of the Asian financial crisis as decades of government-directed lending to state companies left China’s biggest banks on the brink of bankruptcy. Since then, the firms have created a labyrinth of subsidiaries to offer loans and engage in other financial businesses.

Cinda has 318 subsidiaries, with controlling stakes in 65 of them, compared to 195 and 30 at Huarong respectively, according to an October report by Financial Regulation & Law. China Orient has 257 subsidiaries.

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The bad-debt managers haven’t tapped the offshore bond market while uncertainty hangs over Huarong. The last sale of dollar debt by any of the firms and their units was China Cinda HK Holdings Co.’s $2 billion offering in January.

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