Hong Kong’s New World downplays debt-deal rumours as analysts see path out of crunch
Government rhetoric about bank leniency towards developers is ‘favourable’ for the debt-laden company, Morningstar analyst says
The city’s most indebted developer said in a stock-exchange filing on Monday that it was aware of speculation about the refinancing of its existing loans, adding that it remained “actively engaged” with its creditors.
The statement followed a recent Bloomberg report that said the debt-laden firm was nearing a HK$87.5 billion deal to refinance its loans after months of negotiation, citing sources familiar with the matter. The deal would require consent from more than 50 lenders by June 30, and failure to meet this threshold could trigger covenant breaches, force the release of pledged collateral or lead to repayment demands, the report said.
“[New World’s statement] is more about managing investors’ expectations given that the refinancing terms have not been finalised,” said Jeff Zhang, an analyst with Morningstar.
The proposed refinancing deal was said to be backed by some 40 assets, including the company’s New World Tower headquarters and its flagship Victoria Dockside complex in Tsim Sha Tsui. Bloomberg also reported that New World was in the market for a separate HK$15.6 billion loan secured against Victoria Dockside to support the larger refinancing exercise.