Hong Kong, November 18, 2025 – New World Development (0017.HK), one of Hong Kong’s largest and most indebted property developers, announced on Tuesday that it expects to reduce $1.3 billion of its debt following the early deadline for its U.S. dollar bond exchange offer. The majority of the debt reduction comes from perpetual bonds.

The early bond swap deadline, which ended on Monday, offered bondholders a cash incentive and a smaller haircut for participating ahead of schedule. The exchange offer, launched this month, aimed to swap up to $1.9 billion in perpetual bonds, cutting roughly one-third of these instruments and improving the company’s liquidity position.

Strategic Debt Reduction

New World Development said in a filing that the exchange offers will enable immediate deleveraging, reducing $1.02 billion of outstanding perpetual bonds and $29.9 million of senior notes after the early settlement. This comes as the company seeks to boost cash flow and avoid defaults amid a challenging property market and tight financing conditions in Hong Kong.

Earlier in 2025, the developer had deferred coupon payments totaling $77.2 million on four perpetual bonds scheduled for June. To strengthen liquidity, it also secured an $11.24 billion loan refinancing package and a separate $760 million loan facility.

Details of the Bond Exchange

Through the exchange, New World aims to convert part of its $4.5 billion outstanding perpetual bonds, with coupons ranging from 4.125% to 6.25%, into up to $1.6 billion new 9% perpetual bonds at a 53% haircut. Early participants by November 17 received a reduced 50% haircut along with $20 cash per $1,000 bond.

The company also plans to swap part of its $2.3 billion senior notes due 2027-2031, with coupons between 3.75% and 8.625%, into up to $300 million new 7% senior notes maturing in 2031. Haircuts for these notes range from 12% to 32.5%, with slightly lower haircuts for early tenders. The exchange offers are set to expire on December 2, 2025.

Market Context

The move reflects New World Development’s efforts to stabilize its balance sheet and navigate the ongoing downturn in Hong Kong’s property sector. Analysts highlight that the company’s proactive approach to debt restructuring, including the early bond swap and refinancing packages, is critical for maintaining investor confidence amid persistent market volatility.

Global markets also remain sensitive to financial developments, with U.S. stocks tumbling on Monday; the Dow lost over 1%, while the S&P 500 and Nasdaq each fell just under 1%.