The Cheng family of New World has unexpectedly started a shopping spree.

Two days ago, New World Development, a real estate giant in Hong Kong, announced a deferral of interest payments on its four perpetual bonds. In response, the market didn't even bat an eyelid. It's become a common occurrence. This isn't the first time, and it certainly won't be the last.

Over the past period, the main theme of the Cheng family's story has been letting go. They've been selling hotels, selling K11, and selling all sorts of things.

Interestingly, in this May, there's actually a different picture: Members of the Cheng family have started buying.

The protagonist is To Cheng Sau Ha, with the English name Amy. People in the industry call her Mrs. To. Her name in the genealogy of Hong Kong's wealthy families means she was born with a silver spoon in her mouth. She is the daughter of New World founder Cheng Yu-tung and the sister of Cheng Kar-shun. Her husband, To Wai Hoi, has long served as a non-executive director of New World.

Mrs. To is usually low-key, but when she makes a move, it creates ripples in the bond market. By checking the announcements on the Hong Kong's disclosure platform, it can be seen that in May this year, Amy's bond account carried out a series of smooth operations.

From May 6th to May 14th, Amy increased her holdings of New World's bonds in four installments. The US dollar bonds that Amy increased her holdings in were issued by NWD (MTN) LIMITED of New World. NWD (MTN) LIMITED has 14 outstanding bonds, all with relatively long terms, and they will mature successively starting from June 2027. Her holdings increased from the original HK$78 million to HK$202.8 million. That is to say, in just a few days, she bought a total of HK$124.8 million.

Interestingly, she bought aggressively and sold even more decisively.

During the same period, Amy continuously sold bonds issued by two other issuing entities of New World. One issuing entity is NWD FINANCE (BVI) LIMITED. Four of New World's outstanding perpetual bonds are mainly issued by this entity. Amy sold US$16 million, and her holdings decreased from the original US$117.875 million to US$101.875 million.

The other issuing entity is NEW WORLD CHINA LAND LIMITED, which has only one outstanding bond maturing in 2027. Amy originally held HK$27.1674 million worth of this bond, and this time she cleared all of her holdings.

To put it simply, Amy reduced her holdings of perpetual bonds with deferred dividend payments at any time and short-term bonds that are about to mature and have concentrated risks; while what she bought were bonds with longer terms.

Based on the prices disclosed on the disclosure platform, it's highly likely that the bonds Amy bought will mature in 2029. However, Amy sold more than she bought in May, with a net cash-out of US$3.55 million. If you look at the long - term, you'll find that this is a grand drama of arbitrage, stop - loss, and position - swapping.

Do you remember the debt swap of New World that shocked the market at the end of last year?

At that time, in order to relieve the liquidity pressure, New World proposed a rather demanding debt management plan to its creditors:

For every US$100 face - value old debt, it would be exchanged for about US$50 of new notes. The company's tone at that time was almost pleading, saying that this was the "optimal solution within its capabilities". Many institutional creditors nodded in agreement due to the terms.

But Amy didn't. She held on to her original bonds and didn't exchange them. As a result, in 2026, New World released news about asset sales from time to time, and the market sentiment gradually changed from panic to wait - and - see. The bonds that had fallen to the abyss of US$50 climbed back to over US$80 by May when Amy made her move. From US$50 to US$80, she not only avoided the worst - case scenario but also completed a cash - out.

For the affairs of a wealthy family, outsiders watch as a show, while insiders do the accounting. On one hand, there's the asset - slimming in the news headlines that's causing headaches, and on the other hand, there's the quiet maneuvering and swapping in front of the trading screen.

Amy didn't say a word. She just voted with her feet and incidentally added a rather nice yield curve to her account.

Uncle Tong (Cheng Yu - tung) probably used to tell his children about doing business, saying "Don't do what you're not familiar with, and go all - out when you're sure". Now, in a way, his daughter's maneuvers in the bond market have learned her father's philosophy, except that the battlefield has moved from the land auctions at the foot of Victoria Peak to the dancing numbers on the bond trading screen.

This article is from the WeChat official account “Lushu”, author: Very Diligent Lushu. Republished by 36Kr with permission.