New World Development offers US$1.9 billion debt swap to boost liquidity
The Hong Kong-listed developer will raise up to US$1.6 billion in new perpetual securities and around US$300 million in fresh notes
Heavily indebted New World Development (NWD) has launched exchange offers for US$1.9 billion of its outstanding perpetual securities and notes to optimise its debt profile, enhance its liquidity and improve its financial position amid a challenging property market.
The exchange offers covered a series of existing instruments, including perpetual securities issued by NWD Finance and notes issued by NWD (MTN) and New World China Land, which were guaranteed by NWD, according to a filing to the Hong Kong stock exchange on Monday.
The company intended to offer up to US$1.6 billion in new perpetual securities and around US$300 million in new notes, the filing said. The exchange offers were subject to minimum participation of at least US$500 million in perpetual securities and US$100 million in notes, unless those conditions were waived by the new issuers, it added.
“The operating environment for real estate developers in Hong Kong, including the company, has been adversely affected by sustained market headwinds and constrained access to funding for property development activities,” NWD said.
These factors, together with negative credit events within the sector, had contributed to heightened investor and creditor concerns regarding the financial condition and operational stability of sector participants, it added.