By Janice Huang | Updated on Oct 06, 2026 at 10:30 AM
New World Development Co., the stressed Hong Kong developer that’s become a symbol of the city’s efforts to move past its property slump, is seeking to buy more time to pay off creditors with a new bond exchange offer.
The company is proposing to swap three notes — due in January and June next year as well as in 2028 — for securities that would instead mature in 2032, according to a stock exchange announcement on Tuesday. The notes have a total of about $991 million outstanding, but the exchange offer is capped at $600 million, meaning holders would have to retain some of their existing bonds.
The move is the latest attempt by New World to stabilize its finances after years of liquidity woes sparked by a prolonged property slump in Hong Kong and mainland China. New World has been under intense investor scrutiny over its refinancing plans, given the sizeable amount of debt maturing over the next few years. The company recently reported a record $3.6 billion loss for the fiscal year, after a massive writedown on a Hong Kong airport complex.
The market response was mixed following the announcement of the exchange offer. The three existing notes gained 0.5-1.25 cents, at about 97 to 98.875 cents on the dollar, according to traders. New World’s shares, meanwhile, extended declines since last week, ending down 3.5% at the lowest in more than a year.
“The bond exchange itself shouldn’t have much impact on the share price,” said Leonard Law, senior credit analyst at Lucror Analytics Pte. “The decline may instead reflect investor expectations that a dilutive rights issue could be announced in the near future.”
People familiar with the matter said earlier this year that the billionaire Cheng family, which controls New World, has been considering a capital injection through a rights offering. In February, however, Chief Executive Officer Echo Huang said that the company had no plans for share placements or rights issues at the moment.
New World will hold a series of roadshow meetings to discuss the exchange offer in Hong Kong on Wednesday and Thursday, and in Singapore on Friday, according to people familiar with the matter.
New World didn’t respond to a request for comment.
The exchange offer covers three tranches of unsecured bonds, including $456.9 million of 4.75% notes due January 2027, $162.6 million of 5.875% bonds due June 2027 and $372 million of 8.625% securities due February 2028.
Those could be exchanged for 7.375% senior secured bonds, plus a cash payment, according to the exchange filing.
New World said the transaction is aimed at optimizing its debt maturity profile, enhancing balance-sheet flexibility and improving liquidity amid ongoing challenges in Hong Kong and mainland China’s property markets, according to the exchange filing.
“We think take-up could be stronger for the two 2027 bonds, where holders get a meaningful coupon step-up to 7.375% and move into a senior secured Victoria Dockside-linked structure,” said Bloomberg Intelligence analysts Daniel Fan and Hui Yen Tay. “The economics are less compelling for the 2028s because holders would give up 125 basis points of coupon, even with the stronger security package,” they added.
The debt swap follows a liability-management exercise in 2025, when New World exchanged some perpetual securities and notes. That transaction resulted in the issuance of about $1.18 billion of new perpetual securities and roughly $187 million of secured notes due in 2031, also linked to Victoria Dockside.
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New World’s efforts to shore up liquidity have gained additional support from its largest shareholder, Chow Tai Fook Enterprises Ltd., which has indicated it is prepared to provide backing to the company, according to a filing last week. Its decision to exit the 11 Skies complex near the airport also extricated the company from years of financial obligations, even though it helped push it to its third annual loss in a row.
The exchange offer will remain open until Oct. 20, with holders who tender bonds before an earlier deadline eligible to receive additional cash incentives. Deutsche Bank AG and HSBC Holdings Plc are acting as dealer managers for the transaction.
The notes maturing in January 2027 will have the highest priority for the debt swap, followed by those due in June 2027 and then the February 2028 bonds. The company also set a separate $200 million cap for exchange of the 2028 notes, underscoring its focus on addressing its earliest maturing debt, according to the exchange offer document.