Failure to reach a deal could lead to demands for immediate repayment. The repercussions would threaten both New World and many of the banks which are already suffering from a sharp rise in non-performing loans from commercial real estate. The stakes are so high that in many cases, the banks’ chief risk officers have stepped in, people familiar with the matter said. Even chief executive officers of banks are closely monitoring the situation with frequent updates, the people added, asking not to be identified as the matter is private.
Hong Kong bankers have become fixated on an US$11 billion loan deal with unusually high stakes for the financial hub.
New World Development Co, an embattled property developer controlled by one of Hong Kong’s richest families, is aiming to complete one of city’s largest-ever corporate refinancing deals with more than 50 banks by the end of June after pushing back an initial deadline for this month. So far, at least 12 banks have agreed to terms while the rest are still talking, according to people familiar with the matter.
