Wanda rejects rumours of bond sell-off by banks as prices slump
One of the company’s bonds tumbled 3.94 per cents as ‘rumours’ spread online that major banks had ordered their traders to sell
Dalian Wanda Group’s stock and bond prices tumbled on Thursday amid speculation that banks started to dump their holdings after the regulator asked them to check their exposure to the company’s overseas debt.
Several Wanda bonds slumped in morning trade. A five-year, 8 billion yuan bond fell the most, closing down 3.94 per cent from 98 to 94.14 yuan on the Shanghai bourse. Another three-year, 6 billion yuan bond traded in the interbank market saw its yield jump 167 basis points in a matter of hours. Bond prices fall when yields rise.
Wanda Film dropped as much as 9.9 per cent in the morning, before trading was halted in Shenzhen at 1pm.
In a statement released at midday on Thursday, Wanda Group said speculation swirling on the internet that China Construction Bank and other big banks had issued instructions to their traders to dump its bonds was merely “rumour”, adding that the operation of the company is “sound”.
“After investigation we found CCB and other major banks had not given orders to sell Wanda bonds,” the statement read.
Before the statement came out, Wanda Properties International’s US$600 million 2024 notes plunged 10.7 cents on the dollar to 101 cents in Hong Kong. It rebounded to 104 cents after the rebuttal of the rumours, but fell again to 102 cents.
Mainland media outlet Caixin reported in the afternoon that the banking regulator had asked lenders to scrutinise the overseas loans of Wanda and several other conglomerates earlier this month.
This was later confirmed in emails seen by the South China Morning Post which showed Wanda, Fosun, Anbang, HNA and Zhejiang-based Rossoneri Sport Investment – the vehicle used by Chinese businessman Li Yonghong to acquire Italian football club AC Milan in April – have been singled out for scrutiny by local banks, under a directive by the banking regulator.
A closer check of bond trading showed trading volume had climbed since June 19. One interbank bond of Wanda’s registered 1.52 billion yuan of transactions on that day, up from 350 million yuan the previous day.
The entertainment-to-property giant had issued a total of 125.5 billion yuan in corporate bonds,
of which 87 billion yuan are onshore and the rest offshore, according to Bloomberg data.
Wanda agreed on Wednesday to buy a plot of land in London for US$593 million. It is unclear whether the latest developments will affect the deal.