Chinese conglomerate Wanda seeks US dollar bond extension as liquidity tightens

A KEY unit of Dalian Wanda Group is asking to extend the maturity date for a US$600 million bond as a liquidity crunch deepens for the troubled Chinese conglomerate.

Wanda Properties International wants to push back the maturity on the 7.25 per cent note by almost a year to Dec 29, 2024, according to a statement to the Hong Kong stock exchange. It’s offering to pay 10 per cent of the principal in January, 20 per cent in May, 30 per cent in September, and the rest when due, according to people with knowledge of the matter, asking not to be identified as the discussions are private.

The group is facing “challenges in raising new financing or refinancing its existing indebtedness in the international capital markets,” Dalian Wanda Commercial Management Group, the guarantor of the bond, said in the statement.

Wanda was once seen as among the few high-quality Chinese issuers in the junk-bond market because it focuses on commercial real estate and asset-light property management business. Tuesday’s (Nov 21) statement came after investors rejected a proposal by its mall unit to delay a repayment of 30 billion yuan (S$5.6 billion) plus interest due by year-end.

The bond in question is Wanda’s closest offshore US dollar bond maturing. It fell 16 cents on the US dollar to 46.9 cents in mid-afternoon on Tuesday.

The conglomerate has two other notes due in 2025 and 2026, totalling US$800 million.

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The 2024 and 2025 notes are on pace for a record drop, according to Bloomberg-compiled prices. The 2026 note is set for its worst loss since July.

Wanda spooked the market and raised governance concerns in July when it gave shifting messages to investors about its ability to repay a US$400 million US dollar bond due then. The company eventually made the payment.

The consent solicitation agent is Deutsche Bank. The voting deadline for the consent is Dec 8, 4 pm London time. A bondholder meeting will be held on Dec 13 at Linklaters’ office in Hong Kong. BLOOMBERG