Tremors from HNA unit loan default felt in S’pore

By BLOOMBERG

HONG KONG • The loan default in Hong Kong by HNA Group Co Ltd unit CWT International Ltd is causing tremors in Singapore.

Listed real estate investment trusts in the city-state that count CWT as a tenant dropped on concerns that there might also be missed rent payments.

Shares of Cache Logistics Trust extended declines yesterday to the lowest in more than a month.

Meanwhile, Mapletree Logistics Trust is down 4.1% since Monday, on track for its biggest weekly decrease since February 2018.

CWT’s Singapore business is among the top 10 tenants of both landlords.

CWT — which does commodity marketing and provides tourism and logistics services — hasn’t defaulted on its rental payments and there are no arrears due, Mapletree Logistics said in a filing to the stock exchange on Tuesday.

Cache Logistics said CWT contributes about 16.5% to its gross rental income, down from 20.6% as of Dec 31.

Analysts at UBS Group AG, Citigroup Inc and DBS Group Holdings Ltd also moved to allay investor concerns, saying any impact should be short-lived.

Brandon Lee of Citigroup expects CWT’s potential default to only have a shortterm overhang on Mapletree Logistics. He noted the firm’s strong profitability, adding that potential asset sales also provide some comfort.

In the worst-case scenario, Mapletree Logistics could re-lease the properties. — Bloomberg