SHANGHAI :
Fall of Wanda Group Stocks and Bonds May Cause Its Financing Costs to Soar, Insiders Say
Xu Wei
DATE:  Aug 29 2017
/ SOURCE:  Yicai
Fall of Wanda Group Stocks and Bonds May Cause Its Financing Costs to Soar, Insiders Say Fall of Wanda Group Stocks and Bonds May Cause Its Financing Costs to Soar, Insiders Say

(Yicai Global) Aug. 29 -- The value of Dalian Wanda Group Co.'s stocks and bonds has dropped several times since June. The multiple hits may lead to a sharp rise in bond issuance cost, 21st Century Business Herald quoted insiders as saying today.

Various institutional investors dumped corporate bonds and medium term notes issued by Dalian Wanda Commercial Properties Co. [HK:3699] on June 22. The overall rate of return offered by the company rose to 7.7 percent from 5.5 percent, and Wanda Film Holding Co.'s [SHE:002739] shares fell 9.87 percent on that day.

The stock price of Wanda Hotel Development Co. [HK:00169], Wanda Group's affiliate, declined 10.98 percent in the morning session yesterday and fell 8.09 percent for the whole day. Trading of Wanda Film shares was suspended.

Wanda Commercial Properties' dollar-denominated bonds set to mature in 2024 fell 2.4 percent, while 16Wanda01 and 16Wanda03 closed at USD14.31 (CNY94.38) and CNY93.38, down 0.11 percent and 0.45 percent, respectively.

Wanda Group may face short-term financing difficulties. Even if it issues bonds, the interest rate may be hundreds of basis points higher than former bonds, the asset management department head at a securities trading firm in Beijing said.

The latest Wanda Commercial Properties medium term note, the 17Dalian Wanda MTN3, was issued on June 6. The one-year short financing product issued by Wanda Group on June 28 were valued at CNY600 million with an interest rate of 6.33 percent, which is hundreds of basis points higher than that of those issued by AA+ entities in the same period.

Investors should be cautious about Wanda's projects, said a trust business worker in Beijing. They can partake in schemes with controlled risk, but market participants are worried about Wanda Group's subsidiaries and the difficulties and high financing costs they will face, she said.

Follow Yicai Global on
Keywords:   MSCI