PIMCO And RRJ Just Took 80% Of A $500 Million Hong Kong Property Bond

Hong Kong's property market has been in a rough stretch. Banks have pulled back from making loans to builders.

Richard Li's property firm just found another way around it.

Pacific Century Premium Developments is the Hong Kong builder behind luxury projects like Pacific Century Place in Jakarta. The firm raised $500 million through a new bond sale. PIMCO and RRJ Capital took roughly 80% of the issue.

Why This Deal Stands Out

Big public bond deals from Hong Kong builders have been rare for almost two years. The sector has struggled since 2023.

Falling home values and China exposure made banks slow to make new loans.

That's where private credit comes in. RRJ Capital was founded by Richard Ong. He's a former Goldman banker.

RRJ has been one of the most active private credit shops in Asia. PIMCO has been building its Asia property book too.

The two firms aren't new to working together. They teamed up in 2024 to do a $1 billion loan with a different Hong Kong borrower.

We track the deals private credit is doing in Market Briefs every morning. A free investing masterclass comes with sign-up.

What PCPD Gets

The notes mature in May 2029. That gives PCPD four years of runway before it has to repay or roll over again.

For a builder in a stressed market, that's breathing room banks won't give right now.

The bond also signals trust from two of the biggest names in private credit. PIMCO manages roughly $2 trillion in assets. RRJ runs one of Asia's largest private credit shops.

For PCPD, having both firms in the deal is a credit boost as much as a cash one.

Why It Matters

Hong Kong's property sector hasn't seen a real rebound yet. Vacancy rates remain high. Luxury home prices are still well below their 2021 peaks.

Deals like this one show that money is still on the table. Builders just have to go outside the bank market to find it.

Private credit has been picking up where banks have stepped back across Asia. The trend is speeding up as more builders face loan walls.

Who Else Is Watching

Other Hong Kong builders with bonds due in 2026 and 2027 will be watching this deal closely.

If PCPD's pricing holds up, it sets a bar for the next round of issuers. If it doesn't, more borrowers could be forced to sell assets instead.

Distressed property funds in Asia have been raising fresh money. They're betting the worst is close to over.

The Bigger Asia Picture

Hong Kong is not alone. Mainland China builders have been in slow-motion crisis since Evergrande in 2021. Singapore and Japan are tighter markets but not immune.

Private credit funds have flooded into the gap. PIMCO and RRJ are just two of the bigger names.

For US investors with broad Asia ETFs, the trend is worth a look. Funds with heavy HK or China property weight have been laggards for years.

Worth Noting

With PIMCO and RRJ each taking a piece, PCPD has four more years of runway.

Get Market Briefs in your inbox every weekday morning. A free 45-minute investing course comes as a bonus.