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| HSI1 | 25,935.41 | -16.99 | 238.82B |
| HSCEI1 | 9,163.24 | -9.97 | 79.37B |
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2025-11-05 10:48:46 NEW WORLD DEV (00017.HK) recently announced an exchange offer involving its existing perpetual bonds and bonds, according to a BofA Securities report. The company plans to issue up to USD1.6 billion in new perpetual bonds and USD300 million in new bonds, implying a discount of 50-53% for perpetual bonds and 17-21% for bonds. From an equity perspective, the impact is mixed. Positively, this exchange offer could reduce NEW WORLD DEV's total debt by up to USD1.9 billion and its annual interest expenses by USD44 million. However, a report from BofA Securities' credit research shows that NEW WORLD DEV may need to undertake another debt management operation in 2026. The main upside risk to NEW WORLD DEV's Underperform rating from BofA Securities is potential capital injection from its parent company CHOW TAI FOOK (01929.HK) and other investors. Considering that NEW WORLD DEV may still need to delay the payment of dividends on the new perpetual bonds, the broker believes the likelihood of introducing new third-party investors to inject equity before completing another debt management operation is low. Based on a 64% discount to net asset value, BofA Securities set a target price of HKD4 for NEW WORLD DEV, one standard deviation wider than the average level since 2018, reflecting the uncertainty of bank loan accessibility due to its high leverage. The broker also reiterated the Underperform rating. ~ AAStocks Financial News Web Site: www.aastocks.com | |