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<Research>M Stanley: NEW WORLD DEV (00017.HK) Debt Exchange Offer Has Significant Impact; Rating Underweight
Recommend 6 Positive 8 Negative 15 |
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NEW WORLD DEV (00017.HK) announced a US$1.9 billion debt exchange offer, with newly issued perpetual capital securities (PCS) amounting to up to US$1.6 billion at a coupon rate of 9% and newly issued US$300 million notes at a coupon rate of 7%, maturing in 2031, according to Morgan Stanley's research report. The broker estimated that this US$1.9 billion new loan can reduce total net debt by as much as $12.9 billion, equivalent to 8% of its baseline debt as of the end of June 2025, which is significant. Morgan Stanley added this is marginally positive for NEW WORLD DEV's equity holders, but not a complete solution to its high debt situation. The stock is trading at a projected PB ratio of 0.1x and a 34% discount to its anticipated net asset value (NAV) per share, with rating at Underweight and a target price of $5.5. AASTOCKS Financial News Website: www.aastocks.com |
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