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<Research>UBS: Some Foreign Banks' Absence from NWD's Refinancing May Spark Concerns; CN Banks Can Fill Funding Gap
Recommend 27 Positive 53 Negative 32 |
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According to reports, NEW WORLD DEV (00017.HK) is in talks with more than 50 banks for an HKD87.5 billion refinancing loan, which is expected to become the second Hong Kong developer after ROAD KING INFRA (01098.HK) in recent years to defer perpetual bond interest payments, UBS released a research report noting. While NWD is said to have secured over HKD50 billion in financing commitments from major banks such as HSBC, HANG SENG BANK (00011.HK), and BANK OF CHINA (03988.HK), some foreign banks reportedly have not participated in the refinancing and are demanding repayment at maturity. In UBS' opinion, this could trigger market concerns over banks scaling back credit support, potentially worsening liquidity issues for Hong Kong developers and leading to broader defaults. Still, even if foreign banks scale back their operations, the broker believes Chinese banks have the capacity to fill any funding gaps and may provide refinancing support to developers able to offer additional collateral. UBS currently maintains a neutral view on the banking sector. It gave a Neutral rating to BOC HONG KONG (02388.HK), HANG SENG BANK, and BANK OF E ASIA (00023.HK), with BOC HONG KONG listed as the top pick among Hong Kong's bank stocks. AAStocks Financial News |
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