Hong Kong property developer New World Development (0017.HK) has secured a term loan facility of up to HK$5.9 billion ($758.62 million) from Deutsche Bank AG (DBKGn.DE), a German multinational investment lender. New World Development is a large-scale property developer with a focus on developing premium properties. The company also has diverse businesses in areas like infrastructure and services.
The announcement follows New World’s confirmation earlier in the month that it was in discussions with Deutsche Bank regarding a loan facility. The facility includes an initial committed tranche of up to HK$3.95 billion. These funds are earmarked for the group’s general financing activities. The loan will be secured by a first-priority mortgage on the Victoria Dockside property and related assets.
New World retains the ability to use Victoria Dockside as collateral for additional financing to meet its business needs, the company stated. Despite securing a significant $11.24 billion loan refinancing package earlier in the year, the company requires additional funding to decrease its debt and maintain operations amidst a challenging property market.
Analysts have been monitoring New World’s debt situation, especially amid concerns it could indicate a wider sector crisis akin to the one experienced in mainland China in 2021. New World’s current debt challenges stem from an ambitious expansion phase, which coincided with Hong Kong’s political instability, the COVID-19 pandemic, and a prolonged downturn in the real estate sector.
