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Dalian Wanda bond prices rise after Chinese conglomerate says creditors have not sought early repayment of loans worth US$1.3 billion

  • Conglomerate will benefit from the release of pent-up demand following China’s reopening, Nomura says
  • Wanda only high-yield China property issuer in the offshore debt market so far this year

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Dalian Wanda’s bonds and stocks have been hit by market jitters about its financial health in recent weeks. Photo: Reuters
Iris Ouyangin Shenzhen
Chinese conglomerate Dalian Wanda’s dollar bonds jumped to a new high on Monday after it said creditors of loans worth US$1.3 billion had not demanded early repayments following the failed initial public offering (IPO) of unit Zhuhai Wanda Commercial Management Group.
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Its US$400 million 6.875 per cent dollar bond due on July 23 this year was indicated at 87.271 cents on a dollar on Monday, its highest level in two weeks, rising from 77.875 cents on a dollar on Friday, according to Bloomberg data.

The IPO of Zhuhai Wanda, which is 66.96 per cent owned by Dalian Wanda Commercial Management (DWCM), Dalian Wanda’s property management arm, lapsed for a third time at the end of April after it failed to submit relevant listing documents within six months of a mandatory deadline. If Zhuhai Wanda failed to list by May 8, banks with more than 66.67 per cent of Dalian Wanda loans could demand repayments, DWCM said in a statement on Friday, adding that none had done so as of date.

“Overall, we are comfortable with DWCM’s cash-cow business itself and view its business [as benefiting] from pent up demand after [China’s] reopening,” Nomura analyst Iris Chen said in a note last week.

Dalian Wanda’s bonds and stocks have been hit by market jitters about its financial health in recent weeks, as well as speculation that an unspecified DWCM subsidiary intended to extend all of its onshore trust loans. Early redemption calls would have put further pressure on tight cash flow at the conglomerate, which was once viewed as one of the few healthy Chinese developers in a broader sector facing turmoil.
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The conglomerate has been the only high-yield China property issuer in the offshore debt market so far this year. It was deemed a safer player in China’s real estate market amid frequent bond defaults and restructurings due to its asset-light business model.
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