Staff reporter and Bloomberg
Hong Kong developer New World Development (0017) shares jumped as much as 3.6 percent to HK$5.37 yesterday, following reports that major mainland banks maintained, and may potentially increase, their credit support for the developer.
Credit intelligence provider Octus, citing sources, reported the mainland regulators held a meeting last month and instructed the country's four largest state-owned banks - China Construction Bank (0939), Agricultural Bank of China (1288), Industrial and Commercial Bank of China (1398), and Bank of China (3988) - to sustain their existing credit lines for New World Development and explore additional financing options.
The banks are reportedly reviewing their exposure to the developer and assessing the potential implications of increasing their credit support.
New World and the four banks did not respond to Octus' request for comment.
New World's shares closed 1.16 percent higher at HK$5.24.
The developer proposed a refinancing plan last month, aiming to replace all its unsecured loans due this year and next with a HK$60 billion three-year secured loan backed by nearly HK$120 billion in assets, targeting completion in the first half of the year.
Ares Management approached at least two banks in recent weeks to purchase their holdings of debt issued by New World, according to people familiar with the matter.
The US-based alternative investment manager was seeking to acquire a share of New World's debt at a discount in hopes of partaking in the company's ongoing refinancing exercise, said the people, who asked not to be identified discussing private matters.
Ares didn't specify the discount or amounts to the two banks, which showed little interest to engage, said the people, adding that the current status of Ares' requests remains unclear.
