New World Development buys back US$610 million or 15% of offshore bonds to ease debt concerns among investors
- Hong Kong developer repurchased US$610.3 million of its dollar-denominated bonds in a public auction, or 15 per cent of outstanding notes
- Buy-back funded by HK$21.8 billion (US$2.8 billion) it received from an asset sale last month; HK$4 billion will also be paid out as special dividends
New World Development, a developer controlled by Hong Kong’s third-richest family, bought back 15 per cent of its offshore bonds, after concerns about its debt load and weak home sales pummelled the stock by 53 per cent this year.
It accepted US$610.3 million from notes tendered by investors through a public auction, according to a Hong Kong stock exchange filing on Tuesday. The buy-back will reduce the total outstanding amount of the seven dollar-denominated notes to US$3.53 billion.
The company started the auction on November 23, three days after receiving HK$21.8 billion (US$2.8 billion) cash from the sale of its entire interest in NWS Holdings, an infrastructure investment group, to the controlling Cheng family. Some HK$4 billion of the cash will be given to shareholders as a one-off special dividend on December 20.
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The developer repurchased five straight bonds at a price of 76 cents to 91 cents on the dollar, and at 60 to 87.5 cents for its perpetual bonds, according to the exchange filing. The discounted prices were above the bonds’ market prices, the company said when announcing tender offer last month.
Investors offered to sell back US$1.59 billion of the bonds to the company, according to the announcement. The two biggest chunks were US$405 million of notes maturing in 2029 and US$424.1 million of its perpetual securities sold in 2021.
Goldman Sachs, HSBC, Mizuho Securities and UBS were the dealer managers in the buy-back tender, while Orient Securities acted as co-dealer manager.