The second phase of MTR Corp Ltd’s (0066) development project in Wong Chuk Hang Station received 37 expressions of interest – including from HNA Group, which has issued China’s most expensive short-term dollar bond, and is believed to be in need of cash.
Other applicants included local giants Wheelock (0020), New World Development (0017) and Great Eagle Holdings (0041).
Located at the southwest of the whole project, the station’s second phase is a residential development. It occupies 92,570 square feet, with a total gross floor area of 492,991 sq ft, and is expected to provide 600 residential units.
The first phase was won by Road King Infrastructure (1098) and Ping An Real Estate, a unit of Ping An Insurance Group (2318).
Meanwhile, HNA Group, which once symbolized China’s insatiable appetite for overseas assets, is offering to sell the country’s most expensive short-term dollar bond ever, as it tries to refinance a wall of maturing debt amid government scrutiny.
It offered a 363-day bond at 8.875 percent, after initially marketing it for about 9 percent, according to an insider.
The sale aims to raise US$300 million (HK$2.34 billion), with the proceeds earmarked to refinance offshore debt, the source said.
The previous record was Herun Holdings’ 8 percent notes sold last month, according to data.
HNA’s sale is the latest indication the Hainan-based conglomerate’s US$40 billion-plus acquisition spree since last year – when it became the largest shareholder in companies such as Deutsche Bank and Hilton Worldwide Holdings Inc – is catching up with the group, as it accumulated about US$28 billion in short-term debt.
HNA’s interest expenses doubled in the first half, when it paid more than any other non-financial company outside of the US and Brazil.
“As an investor, the fact that the company is willing to pay such a high rate for a bond with a year maturity should give one pause,” said Todd Schubert, head of fixed-income research at Bank of Singapore.
Bonds due in a year or less, which do not need government approval, began appearing this year after the National Development and Reform Commission started withholding approval for offshore debt for some sectors.
Meanwhile, the Urban Renewal Authority is inviting 40 developers today to bid on the Reclamation Street and Shantung Street Project in Mong Kok.
Applications will close on December 4.