Hong Kong banks tighten credit as bad property loans grow
LORRETTA CHEN
HONG KONG -- More than five years ago, when New World Development asked banks in Hong Kong for a billion-dollar syndicated loan to fund the construction of a lavish shopping mall by the city's airport, banks had to fight for a share of the deal -- and they did not ask for collateral.
For years, blue-chip Hong Kong property firms and the family dynasties behind them have obtained generous credit lines from banks without the need to provide collateral, in part thanks to their long-standing relationships, impeccable financials and the eagerness of banks to secure large deals. Until recently, interest rates were low and property prices were climbing rapidly.
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