3 Hong Kong Corporate Debt Announcements You May Have Missed Thursday – And What Traders Say

Thursday saw a wave of announcements by companies on the Hong Kong Stock Exchange as in particular property developers and banks react to the Country Garden Holdings Limited CTRYF default on a $15 million interest payment Wednesday.

Here are 3 related Hong Kong Stock Exchange announcements you might have missed along with some investor viewpoints from trading desks on the island:

• Sino-Ocean Group Holding Limited SIOLY asked its creditors for another week to make a bond interest payment due yesterday. The company now wants to make the interest payment on next week on October 26. A meeting to decide this will be held Friday morning in Hong Kong. Trader’s View: This is the second time this month that Sino Ocean has sought a delay on its bond interest payments. In the previous instance, the developer sought an extension of two more months. Although they are shorter extensions than those being asked for by other property developers, the constant request to shift repayment deadlines doesn’t bode well for Sino-Ocean or for its parent China Life Insurance Co Ltd CILJF.
• Bank of China Limited BACHF issued a prospectus for a $1.6 billion medium term note to overseas investors. In the filing, BoC said that it had issued $178 billion of bonds to date and net assets of around $218 billion. The prospectus shows an income statement illustrating rising sales for the bank during 2023. Trader’s View: China’s sovereign fund is snapping up shares of Bank of China now, which has an advantage over competitors now as regional Chinese banks suffer from a real estate loan crisis. The company has significant amounts of leeway to issue more debt if it wants to and increasing its liquidity position at this point only makes for a potentially stronger outlook.
• Swire Pacific Limited SWRAY issued a prospectus for a $5 billion medium term note offering which the company said was for working capital and general corporate purposes. Trader’s View: Swire is one of Hong Kong’s largest conglomerates and property owners, and is also the owner of airline Cathay Pacific which recently placed a $4 billion order with Airbus SE EADSF for 32 brand new A321 neo aircraft. Swire’s stock is flat on the year and the company was recently upgraded by Zack’s Equity Research to Strong Buy. As for Bank of China, increasing the firm’s liquidity position at this point makes sense as the firm can muscle in on struggling rivals.