UPDATE 1 - Jingrui seeks maturity extension for 12.75% March 2022 notes
Published 23 February 2022, 05:27:17 pm
HONG KONG, Feb 23 (IFR) - Jingrui Holdings is seeking to exchange its US$190m 12.75% senior notes due March 11 for new 12.75% notes due September 2023, and is soliciting consents from holders of its remaining US dollar bonds to amend the terms to avoid any cross-default arising from the exchange offer.
The Hong Kong-listed Chinese property developer warned that if the exchange offer fails it may not be able to fully redeem the notes on March 11. The minimum acceptance amount threshold is set at 90%.
Under the exchange offer, there are two options. For option A, holders will receive new 12.75% 2023 notes on a par-to-par basis plus any accrued interest. For option B, per US$1,000 in principal amount, holders will receive US$950 new 12.75% 2023 notes, US$50 upfront principal payment, US$10 in incentive cash consideration, plus any accrued interest.
The deadline is March 1 and settlement will be on or about March 4.
Research firm Lucror Analytics said option B "appears a better choice", given the upfront cash payment and inclusion of a cash incentive, senior credit analyst Leonard Law wrote in a note.
Jingrui has launched a concurrent consent solicitation for its five remaining US dollar bonds with maturities between July 2022 and January 2024 and total outstanding amount of US$1.165bn. They are the 12% July 2022, 12% September 2022, 14.5% February 2023, 12.5% October 2023 and 12% January 2024. Except for a principal amount of US$500,000 of the July 2022 notes, neither the company, nor any of its affiliates, hold any notes, according to the filing.
The principal purpose of the consent solicitation is to obtain the requisite consents to amend the events of default provisions to carve out any default or event of default occurring under the company’s March 2022 notes.
There is a consent fee of US$2.50 per US$1,000 in principal amount.
The deadline is March 1 and payment is expected on March 4.
Haitong International is the dealer manager and solicitation agent. Morrow Sodali is the information, exchange and tabulation agent.
Moody's downgraded Jingrui's rating to Caa2 from B3, and its senior unsecured bonds to Caa3 from Caa1, following the launch of the exchange offer and consent solicitation. The outlook on the ratings remains negative.
The proposal indicates Jingrui's liquidity stress, said the rating agency. In particular, the company has offshore bonds of US$600m maturing before the end of December 2022.
Jingrui had unrestricted cash of Rmb11.1bn (US$1.76bn) as of end-June 2021, but Moody's estimates that a significant portion resides at the operating project level and cannot be used to repay debt at the holding company level, particularly the offshore bonds.
By Carol Chan