Bonds of a Dalian Wanda Group Co (萬達集團) unit fell yesterday after Chinese media reports — denied by the company — that its billionaire chairman Wang Jianlin (王健林) and his family were on Friday stopped at Tianjin airport near Beijing as they were about to depart for London.
The US$600 million of 2024 notes sold by Wanda Properties International Co (萬達商業地產有限公司) dropped as much as 3 cents on the dollar to US$0.98, the lowest since July 19, before paring losses to US$0.995 as of 3:29pm in Hong Kong.
Shares of Wanda Hotel Development Co (萬達酒店發展), Wanda’s only traded unit in Asia, plunged as much as 11 percent, and were 8.1 percent lower as of 3:30pm.
The real-estate and entertainment group yesterday denied an article by Bowen Press and other reports on Wang’s travel ban, calling the articles “groundless,” according to a company statement posted on its Web site.
Wanda scrapped plans to buy a land plot in London for £470 million (US$606 million) amid the Chinese government’s intensifying scrutiny of overseas investments.
The company, along with Anbang Insurance Group Co (安邦保險集團), Fosun International Ltd (復星國際) and HNA Group Co (海航集團), has been under increasing scrutiny this year as the Chinese Communist Party steps up its clampdown on capital outflows to protect the yuan from weakening.
“The company clarified media reports, which helped to stabilize its bonds and stop them from falling further,” said Zhi Wei Feng, Singapore-based head of China corporate credit research at Standard Chartered PLC. “But investor sentiment remains fragile as there is no clear picture of whether the reports are totally groundless.”
The 2024 bonds were down 1.6 cents yesterday, extending their losses since the start of June to about US$0.12.
Dalian Wanda Commercial Properties’ (大連萬達商業地產) 2021 yuan-denominated notes yesterday dropped 1.5 yuan to 90 yuan, taking the total decline to 10 yuan since they were sold at par last month.
The US dollar notes plunged in the middle of June when China’s banking regulator asked some banks to provide information on overseas loans to Wanda Group, people familiar with the matter said at the time.
They were hit again the following month on news that authorities planned to punish the conglomerate for breaching China’s restrictions on overseas investments by cutting off funding and denying it necessary regulatory approvals, people familiar with the matter said.
“The bond prices should remain volatile in the near-term due to any headlines,” a research note from JPMorgan Chase & Co said yesterday.
Investors should watch out for any possible decline in funding availability for Wanda Group, the note said.
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