Dalian Wanda Group firm’s bond prices slide on loan extension concerns, subsidiary’s IPO deadline

Dalian Wanda Commercial Management’s offshore bonds fell this week as investors are concerned about possible extension to onshore trust loans
Zhuhai Wanda Commercial Management, an entity controlled by Wanda Commercial, faces a month-end deadline to launch its IPO to raise much-needed cash

Bonds

Iris Ouyang

Published: 6:29pm, 19 Apr 2023

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The offshore bonds of Dalian Wanda Commercial Management, the commercial property management arm of Chinese conglomerate Dalian Wanda Group, have taken a hit this week despite the company denying recent rumours of possible extensions to onshore trust loans.

The slide in bond prices also comes as a six-month deadline by the Hong Kong stock exchange for the initial public offering of an entity controlled by Dalian Wanda Commercial Management is due to expire by the end of this month.

The notes of Wanda Properties International, a subsidiary of Dalian Wanda Commercial Management, due January 2024, were traded at around 81.25 cents to the dollar on Wednesday, compared with 88.375 cents on Friday, according to Refinitiv data.

Its affiliate Wanda Properties Global’s 11 per cent bond due February 2026 was offered at 75.5 cents to the dollar, compared with 81.625 cents on Friday.

Dalian Wanda Group, controlled by Wang Jianlin, has accumulated a large amount of debt. Photo: AFP

The drops came as rumours swirled around in bond traders’ chat rooms that an unspecified subsidiary of Dalian Wanda Commercial Management intends to extend all of its onshore trust loans. Trust loans serve as an important financing channel for developers, usually as a debt instrument to raise funds from investors to finance property companies’ projects.

The rumours have triggered concerns about the financial health of Dalian Wanda, controlled by its billionaire founder Wang Jianlin, and its affiliates.

It also comes ahead of the month-end deadline for the IPO of Zhuhai Wanda Commercial Management Group, which would raise much-needed cash for the company. Dalian Wanda Commercial owns 69.66 per cent of Zhuhai Wanda.

“The IPO process is advancing, everything is normal,” a source close to Dalian Wanda Group told the Post on Wednesday, without elaborating. He also declined to comment further on the loan rumours.

Dalian Wanda returns to offshore markets with US$300 million bond sale

Zhuhai Wanda filed an application with the Hong Kong exchange at the end of October last year, aiming to raise up to US$4 billion, the third attempt by the company to list in the city.

The company could face trouble if it fails to launch its IPO. The company will have to repurchase 30 billion yuan (US$4.4 billion) of equity from its pre-IPO investors if it is unable to successfully list by the end of 2023.

Dalian Wanda unit issues US dollar bond to raise US$400 million

The China Securities Regulatory Commission had questioned Dalian Wanda in March about the delay to Zhuhai Wanda’s IPO and its impact on Dalian Wanda Commercial’s debt repayment capability.

Dalian Wanda Commercial issued a US$400 million bond in February.

Dalian Wanda was placed on a watch list by regulators in 2017 along with Anbang Group, Fosun Group and HNA Group. These privately controlled Chinese conglomerates had accumulated some of the world’s largest debts after snapping up overseas trophy assets, often at premium prices, and were facing significant debt maturities.

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