New World bondholders receive interest payment on dollar note
The builder has prioritised talks with banks for months to secure the loan refinancing deal to ease its liquidity stress
[HONG KONG] New World Development has paid interest due Monday (Jun 16) on a dollar note, according to several bondholders, giving the indebted Hong Kong builder some breathing room as it works to complete an HK$87.5 billion (S$14.3 billion) loan refinancing deal.
The company faced US$5.1 million in interest payments due Monday on the 5.875 per cent bond, according to Bloomberg calculations. Investors were closely monitoring the deadline after the builder recently decided to defer coupon payments on four perpetual notes.
The payment was crucial for New World, as an event of default could be triggered if it failed to honour the coupon within 14 days of the due date, according to an offering document seen by Bloomberg News. It can sometimes take two to three days for dollar bondholders to receive interest payments once they are initiated.
New World did not immediately respond to a request for comment.
New World, which is grappling with HK$210.9 billion of liabilities, is one of the most indebted of Hong Kong’s major developers. Any signal of a possible default by the builder, controlled by the family of Hong Kong tycoon Henry Cheng, could intensify concerns about sluggish real estate market conditions and possible spillover effects.
The builder has prioritised talks with banks for months to secure the loan refinancing deal to ease its liquidity stress. Separately, it is also using one of its most valuable assets in Hong Kong – a harbour complex that houses luxury mall K11 Musea – to seek a new loan of as much as HK$15.6 billion. BLOOMBERG
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