New World’s bond decision seen as red flag for liquidity risks

S&P warns the situation could hurt buyer confidence.

New World Development Co. Ltd.’s decision to defer coupon payments on four senior perpetual bonds has raised investor concerns over the company’s liquidity, S&P Global Ratings said. 

The move follows its earlier choice not to call a $2.71b (US$345m) perpetual bond, leading to a coupon step-up from 6.15% to around 10% in mid-June.

S&P warns the situation could hurt buyer confidence and weigh on Hong Kong’s property market, potentially pushing home prices down 5% to 7% this year. 

Analysts say funding access for developers may tighten, with banks favouring stronger firms and others facing higher borrowing risks.

($1.00 = US$0.13)