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Bond Market News
NWD Plans 6.15% Perp Redemption, $1bn Non-Core Asset Sale
June 28, 2024
New World Development (NWD) has announced its intention to redeem its $453.9mn 6.15% Perp callable in March 2025, citing economic reasons. The developer said that forgoing the call option would lead to a new coupon that is higher than the company’s average funding cost of 5%. Looking at the perp’s terms considering today’s rates, if not called, the new coupon would reset to 10.731%, going by the US 3Y Treasury yield plus a spread of 620.1bp. The perp is currently trading at 96.31, yielding 11.77% to call, and are up over 3 points this week.
Separately, the developer is also continuing with its strategy of disposing non-core assets. As per sources, it expects the completion of HKD 8bn ($1bn) in non-core asset sales by end-June. They added that NWD had conducted asset sales between July 2023 to June 2024 and will soon provide an update on the details thereof.
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