Zhenro Properties Group, Jingrui Holdings, and Yincheng International Holding (three real estate trio) launch exchange offers. They are planning to seek bond maturity extensions. Yincheng International Holding offers a year note issuance. While, Zhenro Properties Group and Jingrui Holdings solicite the issue for the rest of their curves.
As a liquidity crisis happens in China, many Chinese property developers are looking for offshore bond maturity extensions. Currently, there are at least 17 property developers seeking offshore bonds since September 2021.
Based on the regulation, Leonard Law, a senior credit analyst, argued that bondholders will accept exchange offers if the terms are seen as fair. Law adds that thet many consideration to sweeten the company’s willingness to honor the debt. This would include a partial upfront repayment, a larger cash consideration, or even personal guarantees. IFR Asia reports from Law’s analysis that currently Jingrui exchange offers better terms than Zhenro.
Zhenro attempts to propose exchange from its offshore bonds due to its total $1.5bn new bonds which would be due in March 2023. Zhenro will take alternative debt restructuring plan if the offer fails. Jingrui on the other hand, proposed to exchange 12.75% senior notes for another 12.75% new notes due September 2023. Jingrui also requests for consent especially for holders with remaining US dollar bonds to change terms in order to avoid cross-default from exchange offers.
Yincheng, on this occasion launched an exchange offer as much as $165m a year senior notes due March 16 for the new 13% a year bonds. Yincheng uses par-to-par basis in addition to accrued interest. Moreover, the company does not mention the minimum acceptance amount. Zhenro, on the other hand, set an 85% acceptance minimum for each five bonds.
