New World rejects claims of pledging commercial projects as alternative financing

New World Development on Friday rejected claims circulated on social media that the company has pledged its commercial projects as a form of alternative financing, saying the allegations were made with the intention of manipulating the bond and equity trading of the company for personal gains. 

“The assertions … are completely false and misleading,” a spokesperson said. 

“The company will therefore consider reporting the circumstances to the relevant law enforcement agencies and seek legal advice on potentially taking further actions,” the spokesperson also said. 

New World shares fell 5.8 percent on Friday to their lowest closing level since November 3. The per-share price was HK$16.32 as of 4.08 pm. 

Bloomberg reported on Friday that perpetual notes guaranteed by New World – one of Hong Kong’s most indebted real estate firms – have tumbled more than 10 cents this week, extending last week’s record losses of as much as 17 cents. 

Perpetual notes are issued without a maturity date or with long tenors such as 50 years. They are often more volatile due to their sensitivity to interest rate changes. 

The bonds are a type of subordinated or junior subordinated debt, meaning higher risk that investors are wiped out in case of a default. 

(Bloomberg and staff reporter)

Also read: Hong Kong perpetual bonds slump in sign of China property contagion