Hong Kong’s Tycoons Are Damaging the City’s Credit Culture
Old money had it easy, borrowing billions for nothing. That’s coming to an end.
Hong Kong’s A-listers are under scrutiny.
Photographer: Paul Yeung/BloombergHow creditworthy are Hong Kong’s billionaire tycoons? Despite the glamor and prestige they project, the city’s old money are dishing out one nasty surprise after another. As bankers and investors wake up to the reality that they might never be made whole, the easy credit culture long afforded to the elite will inevitably come to an end.
New World Development Co.’s decision not to repay coupons on its perpetual notes was a rude awakening, but it was by no means an outlier. Emperor International Holdings Ltd., a fellow developer that sells luxury apartments, said it had HK$16.6 billion ($2.1 billion) in bank borrowings that are either overdue or have breached loan covenants, which may result in immediate repayment requests.