Private Banks Stop Accepting Fantasia Bonds as Collateral (1)

The private-banking units of Citigroup Inc. and Credit Suisse Group AG have stopped accepting the bonds of Fantasia Holdings Group Co. as collateral amid rising concerns about the Chinese developer’s financial health, according to people familiar with the matter.

The banks have assigned a zero lending value to the notes, meaning their private-wealth clients can no longer use them as security for loans, the people said, asking not to be identified because the matter is confidential.

Representatives for Citigroup and Credit Suisse declined to comment. Fantasia said it’s working on bond buybacks, declining to comment further.

The development underscores ...