Research — SEPTEMBER 24, 2025
Breaking through Debt Turmoil: New World Development and the Road Ahead
On May 30, 2025, New World Development Company Limited (New World) announced it would defer coupon payments on four senior perpetual bonds at the next distribution dates, heightening investor concerns over the company's liquidity. On the same day, its stock price dropped by as much as 11%.1 Long regarded as one of Hong Kong’s “Big Four” property developers and a cash-rich pillar of stability, New World is facing a crisis of confidence that challenges its long-standing reputation.
To better understand the company’s vulnerable situations from a credit monitoring perspective, we used the S&P Global Market Intelligence Early Warning Signals (EWS) Framework, which provides timely warning alerts for early detection of entities at genuine risk of default. The framework employs an intuitive traffic light color scale and is powered by Credit Analytics’ flagship RiskGauge™ model, combining a firm’s probability of default (PD), PD change from the previous period, and qualitative assessments with dynamic thresholds that adjust to the economic cycle.
Founded in 1970 and headquartered in Hong Kong (China), New World is listed on the Hong Kong Stock Exchange (SEHK:17). The company primarily operates in property development and investment across Hong Kong and Mainland China. Its diversified portfolio includes residential, retail, office, and industrial properties. The K11 brand, a flagship cultural-retail destination, is one of the company’s most iconic projects.2
Figure 1 below illustrates how monthly EWS assessments signaled emerging challenges for New World. In June 2023, New World begun with a bb- RiskGauge credit score and a red EWS signal, indicating a high likelihood of default. At that time, New World had accumulated one of the highest debt burdens among Hong Kong developers, estimated around 25.6 billion USD. In February 2024, it reported a projected interim loss of USD 875 million, reversing a profit from the previous year.
Figure 1: Monthly EWS Assessments Trend for New World
Source: S&P Global Market Intelligence as of September 4, 2025. For illustrative purposes only.
Conditions improved in the second quarter of 2024, as New World disposed of non-core assets to recycle capital into its core business. The EWS signal turned green in April 2024, and its RiskGauge credit score improved to bb+. In July 2024, renewed losses, shrinking liquidity, and distressed bond prices reignited concerns. The EWS signal turned red again. Additionally, New World was removed from the Hang Seng Index in December 2024, further eroding investor confidence. Despite securing partial refinancing commitments from banks and implementing board-level changes, the company remained under significant pressure due to its elevated liabilities and ongoing liquidity challenges.3
Recently, the company closed an HK$88.2 billion ($11.24 billion) loan refinancing package4, which has supported a notable rebound in its share price — the largest in several months. However, the EWS signal continues to flash red, reflecting persistent vulnerabilities despite short-term improvements.
This case illustrates that while New World may avoid outright default through potential capital injections5, the EWS framework was effective in flagging emerging stress well in advance. It highlights the importance of monitoring vulnerabilities even when mitigating actions or external support may temporarily stabilize conditions.
Whenever a red signal is generated, we recommend conducting a deeper analysis using additional resources available on the S&P Global Market Intelligence Capital IQ Platform, reviewing detailed company financials, monitoring news and key developments, and performing peer comparison analysis via the RiskGauge Report, to confirm the signal, uncover its underlying drivers, and guide decisions to potentially reduce exposure to vulnerable counterparties.
If you want to learn more about RiskGauge and Credit Analytics’ EWS, please click here.
1 Source: The S&P Capital IQ® Platform.
2 Source: The S&P Capital IQ® Platform.
3 Source: The S&P Capital IQ® Platform.
4 Source: https://www.reuters.com/markets/asia/hong-kongs-new-world-development-gets-1124-billion-refinancing-2025-06-30/
5 Source: https://www.bloomberg.com/news/articles/2025-09-01/new-world-s-cheng-family-weighs-capital-injection-by-year-end