New World Development's Perpetual Dance With Its Bankers
If there's a task you're not obliged to do, but it's expected nonetheless, will there be consequences if you choose not to?
This is the question Hong Kong real estate giant New World Development Co. has to deal with. Last Friday, the company did not issue a notice to call back a $345 million perpetual bond, the deadline if it wants to redeem on the first reset date. As a result, the coupon rate will be stepped up to more than 10% from 6.15%, going by the current Treasury yield.
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