Fri 12/03/2021 06:33 AM
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China Aoyuan Group’s onshore subsidiary Aoyuan Corporation has proposed to repay investors in its overdue investment products totalling RMB 6 billion ($942 million) in instalments or with properties such as apartments, office buildings, retail and parking spaces worth at least RMB 9 billion, according to a repayment proposal released to investors and seen by Reorg. Continue reading for our Asia Core Credit team's reporting on Sunac China, and request a trial to access analysis and intelligence on hundreds more stressed, distressed and performing credits in the region. 

Aoyuan proposed to repay investors with less than RMB 2 million holdings within six months by repaying 20%, 15%, 5%, 5%, 25% and 30% principal each month. For investors with larger positions, the company offered to repay RMB 2 billion upfront within six months and 60% principal in the next six quarters with 5%, 5%, 10%, 10%, 15% and 15% of original principal for each quarter until full repayment by May 2024. Interest rate during the extension period would be 6%.

For investors who choose properties in lieu of cash, Aoyuan would also offer to repurchase the properties after two years.

Aoyuan added in the proposal that it will earmark certain high-quality property projects with good sales records for repaying wealth management products and will transfer 25% of cash from contracted sales or net proceeds from any disposal of the assets to a dedicated repayment account.

The company also stated that it will redeem the products before the extended maturities when the property sales return to levels in the first half of 2021.

Aoyuan announced yesterday that it has received a notice from creditors demanding payment of $651.2 million financing as a result of recent credit ratings downgrades. It said the nonpayment may trigger acceleration of repayment of certain other offshore financing arrangements.

Below is Aoyuan’s capital structure:




























































































































































































































































































































































China Aoyuan Group - Pro Forma as of 08/23/2021


06/30/2021

EBITDA Multiple

(CNY in Millions)

Amount

US$ Amt.

Maturity

Rate

Book


Bank and Other Loans

81,515.6

12,540.9



Amounts due to non-controlling shareholders of subsidiaries

4,310.7

663.2



Amounts due to joint ventures

24,415.3

3,756.2



Amounts due to associates

772.2

118.8



Total Bank and Other Loans

111,013.8

17,079.1

9.6x

20 Aochuang 2A

730.0

112.3

May-20-2022

5.600%

20 Aochuang 2B

86.0

13.2

May-20-2022

-

20 Aochuang Prime

1,000.0

153.8

Jan-20-2022

6.900%

20 Aochuang Sub-Prime

120.0

18.5

Jan-20-2022

-

21 Aochuang B

40.0

6.2

Jul-20-2023

-

21 Aochuang A

710.0

109.2

Jul-20-2023

6.900%

Total Onshore ABS

2,686.0

413.2

9.8x

2018 Aoyuan Private Corporate Bonds 01

-

-

Jul-24-2021

5.000%

2018 Aoyuan Private Corporate Bonds 02

-

-

Jul-24-2021

5.000%

2018 Aoyuan Private Corporate Bonds 04

1,500.0

230.8

Oct-11-2021

8.500%

2019 Aoyuan Private Corporate Bonds 02

1,500.0

230.8

Aug-23-2023

6.800%

20 Aoyuan 02

1,180.0

181.5

Aug-06-2025

5.650%

20 Aoyuan 01

2,540.0

390.8

Mar-03-2025

5.500%

21 Aoyuan 01

1,820.0

280.0

Jul-02-2025

6.800%

Total Onshore Bonds

8,540.0

1,313.8

10.5x

$250 Million 5.375% Senior Notes Due 2022

1,625.0

250.0

Sep-13-2022

5.375%

$188 Million 4.2% Senior Notes Due 2022

1,222.0

188.0

Jan-20-2022

4.200%

$500 Million 8.5% Senior Notes Due 2022

3,250.0

500.0

Jan-23-2022

8.500%

$475 Million 7.95% Senior Notes Due 2023

3,087.5

475.0

Feb-19-2023

7.950%

$200 Million 7.35% Senior Notes Due 2023

1,300.0

200.0

Jun-21-2023

7.350%

$460 Million 6.35% Senior Notes Due 2024

2,990.0

460.0

Feb-08-2024

6.350%

$200 Million 7.95% Senior Notes Due 2024

1,300.0

200.0

Jun-21-2024

7.950%

$230 Million 5.98% Senior Notes Due 2025

1,495.0

230.0

Aug-18-2025

5.980%

$350 Million 6.2% Senior Notes Due 2026

2,275.0

350.0

Mar-24-2026

6.200%

$350 Million 5.88% Senior Notes Due 2027 1

2,275.0

350.0

Mar-01-2027

5.880%

Total Offshore Bonds

20,819.5

3,203.0

12.3x

Total Debt

143,059.3

22,009.1

12.3x

Less: Cash and Equivalents

(70,572.8)

(10,857.4)

Plus: Restricted Cash

7,677.3

1,181.1

Net Debt

80,163.8

12,332.9

6.9x

Operating Metrics

US$ Amt.

LTM Reorg EBITDA

11,587.0

1,782.6


Liquidity

Plus: Cash and Equivalents

70,572.8

10,857.4

Less: Restricted Cash

(7,677.3)

(1,181.1)

Total Liquidity

62,895.5

9,676.2

Credit Metrics

Gross Leverage

12.3x

Net Leverage

6.9x

Notes:
Source: Wind, company filings, Reorg; 2021E Wind EBITDA is used.
1. Issued on February 22, 2021
Pro Forma: For Pro forma, the proceeds from the new bonds were added to cash as the exact use of proceeds for each of the bond raised remains unclear; The repayment for matured debts were subtracted from cash as the exact source of funding used to repay the debt remains unclear
US$ Translation: CNY/USD rate used for USD conversion is 6.5.



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