Stung by a property slump in Hong Kong and mainland China, New World has been struggling with its debt. The swap is the company’s latest move to ease liquidity stress stemming from the years-long downturn. The company completed a record US$11 billion loan deal in June and secured a HKD3.95 billion ($659.3 million) loan backed by its crown jewel asset, Victoria Dockside, in September.
Under the swap plan, New World has offered to issue up to US$1.79 billion of perpetuals, expanding from an original US$1.6 billion after an initial early deadline of Nov 17, in exchange for its old notes at a price of 50 cents on the dollar. It also proposed a debt swap for some of its conventional bonds, at a lower haircut.
“It signals unease with the exchange offer plan and makes it more challenging for the developer to introduce new proposals for other debt instruments, such as Hong Kong dollar bonds,” said Bloomberg Intelligence analyst Daniel Fan.
The general deadline falls on Dec 2 at 11.59pm New York time, giving perpetual bond holders until then to receive US$50 more for each US$1,000 in deferred interest and principal on the existing notes than in the original base offer.
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