Red sky in morning, sailor's warning.

It’s not quite checking the car seats for loose coins and old McDonald’s fries, but it’s pretty close. HNA Group – the Chinese conglomerate that owns over a quarter of Hilton Worldwide, among other holdings – has been repeatedly soliciting its own employees for money:

The New York Times reports that the company advertised via email an “employee treasure” product with an 8.5% return if workers handed over $1,500. A similar one dangled 9%. A third mentioned a return as high as 40% if employees ponied up $15,000. – these are not your typical employee stock programs, but instead appear to be high interest loans, with the company as borrower and its workers as lenders. 40%!

Neither a private company nor explicitly sovereign, HNA has grown to gigantic size during China's period of financial liberalisation. Now with newly enthroned Emperor Xi Jinping restricting financial activities abroad, HNA may be the first significant default event of 2018. It is perhaps the most prominent of the now-flagging Chinese conglomerates, jumping to 170th in the 2016 Forbes 500 list of the world’s largest corporations and reporting $53 billion in revenues for 2016 while making high profile deals in cash that same year (for example the partial acquisition of Hilton).

But financial gravity appears to be kicking in. After three of its subsidiaries (Tianjin Airlines, Hainan Airlines Holding, and Bohai Capital Holding) abandoned plans to issue debt last year, the WSJ reported that HNA pledged its Hilton stake as collateral for additional funding from a lending group led by JPMorgan. The group also recently sold a 363- day $300 million note at a yield of 8.875%. The yield on their sub-one-year notes is also very close to their threeyear bonds. A scenario where they cannot re-issue seems certainly in the realm of possibility.

HNA has also laid out a $4 billion asset-sale plan (out of an estimated encumbrance of $95 billion) and subsidiary HNA Real Estate Group failed to make a payment of RMB 1.7 billion ($272 million) to Citic, noting that the borrower and lender were now in negotiations.

Let’s hope HNA Group employees (and now corporate paper holders) are well diversified.