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Hong Kong-based New World Development (NWD) has entered an advanced phase of discussions with its creditors to restructure an enormous HKD 87.5 billion (USD 11.1 billion) loan package. The move comes amid heightened scrutiny of its debt load among the highest in the region's property sector and follows a recent episode where the company initially flagged a delay in USD 77.2 million in coupon payments on its perpetual bonds. Although the company later paid interest on a senior USD bond, investor nerves remain on edge. Backed by nearly 87% of its targeted lenders, NWD is striving to avert any risk of contagion in Hong Kong's real estate sector.
New World Development (NWD), one of Hong Kong's most indebted property firms, has stepped up efforts to renegotiate its massive loan obligations. The company is now in the final stages of a refinancing arrangement reported to be worth HKD 87.5 billion (USD 11.1 billion), as it seeks to manage financial pressure and stabilise its operations in a turbulent real estate environment. Advertisement
The company, controlled by the billionaire Cheng family, has reportedly received support from around 87% of lenders targeted in the debt refinancing initiative. This level of backing suggests that NWD is making considerable progress in reaching a comprehensive agreement. The refinancing package is expected to involve extending maturities and potentially adjusting interest terms to alleviate short-term repayment stress.
These discussions follow a brief episode of uncertainty when the developer informed investors that it would defer USD 77.2 million in coupon payments on four of its perpetual bonds. While this raised concerns about its liquidity position, NWD later proceeded to pay interest on its senior U.S. dollar bond that matured in the past week, which helped reassure some stakeholders.
NWD's refinancing move comes against the backdrop of a sector-wide downturn, largely triggered by the 2021 property crisis in mainland China. Developers like Evergrande and Country Garden defaulted or narrowly avoided collapse, causing ripple effects that dampened investor sentiment and led to tighter capital flows. As a result, many property companies, including those in Hong Kong, are under growing pressure to preserve liquidity, reduce leverage, and avoid large-scale defaults.
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