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Bond Market News
NWD Releases Price List for Luxury Project at Significant Discount Amid Debt Concerns
February 7, 2025
New World Development’s (NWD) dollar bonds rose by over 3 points across the curve yesterday, after reports suggested that the developer was set to release its first price list for 88 units at its State Pavilia luxury residential project. However, as per the latest news, it has now priced the above project, at a significant discount to raise cash and address its debt of HKD 123.7bn ($15.9bn). The units are priced at an average of HKD 18,540 ($2,381) per square foot, marking the lowest price in the Eastern district in eight years. This price is about 13% lower than the accommodation value of HKD 21,500 ($2,760) per square foot. The 388-unit first phase is to be offered at a range of HKD 6.05-19.59mn ($780k-2.5mn). Analysts had expected higher prices. The lower price is seen as a result of NWD’s need to raise funds at a faster pace due to liquidity pressures, making the project a potential bargain. Despite the discount, experts believe the project’s proceeds will not significantly impact NWD’s efforts to service its dues. With about $16bn in debt and a gearing ratio of 55%, NWD is also seeing declining profit margins on new projects.
NWD’s 6.15% Perp is currently trading at 36 cents on the dollar.
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