Thu 02/18/2021 03:37 AM
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China Fortune Land Development, or CFLD, has sounded out to certain bondholders a preliminary debt settlement plan for all its outstanding onshore bonds. Now that the Chinese New Year holiday is over, the industrial park and property developer plans to begin negotiating with holders over the coming weeks, according to two bondholder sources familiar with the matter. Continue reading for our Asia Core Credit team's analysis of China Fortune Land Development (CFLD)'s preliminary debt settlement plan for its outstanding onshore bonds and request a trial for access to our coverage of thousands of other stressed/distressed debt situations in the region. 

The plan that CFLD has floated includes potentially extending principal payment by three to five years with no upfront cash payment or credit enhancement, the sources said. The plan is preliminary and subject to change based on negotiations with bondholders, the sources noted.

Some bondholders expressed concern about the long principal extension period without upfront payment or credit enhancement such as guarantee. They were also concerned about a lack of asset disposal plans.

Meanwhile, holders of several onshore bonds are scheduled to meet this month in the wake of CFLD’s disclosure that it has RMB 5.255 billion overdue debt, which will trigger cross default of several bonds if the missed payments are not cured within a grace period.

For a Feb. 26 holder meeting for RMB 1.8 billion 5.8% medium-term notes due May 23, 2022, “17 CFLD MTN001,” five mutually exclusive proposals have been submitted including 1) unconditional waiver of cross default; 2) adding a put option; 3) waiver of cross default on the condition that CFLD provides guarantee; 4) waiver of cross default on the condition that the coupon rate is increased by 50bps; 5) waiver of cross default on the condition that the company does not issue new bonds, according to one of the bondholder sources and a third source familiar with the matter.

CITIC Securities, an underwriter of the company’s next onshore maturity, RMB 1.999 billion 7% corporate bond due March 3 “16 CFLD 02,” will convene a holder meeting on Feb. 25 to discuss repayment plans with the exact agenda to be determined, said the first source and a fourth bondholder source familiar with the matter.

Below is the CFLD’s capital structure:






































































































































































































































































































































































































































China Fortune Land Development


09/30/2020

EBITDA Multiple

(CNY in Millions)

Amount

US$ Amt.

Maturity

Rate

Book


Loans and Other Borrowings

123,049.3

17,578.5



Total Loans and Other Borrowings

123,049.3

17,578.5

3.8x

Asset-backed Notes

6,806.0

972.3



Total Asset-backed Notes

6,806.0

972.3

4.0x

17 Jiutong Private Note 01

1,000.0

142.9

Aug-17-2021

6.200%

17 Jiutong Private Note 02

600.0

85.7

Oct-27-2022

6.600%

18 Jiutong 01

1,090.0

155.7

Mar-12-2023

7.400%

18 Jiutong 02

1,400.0

200.0

Jun-01-2021

5.900%

18 Jiutong 03

910.0

130.0

Jun-11-2021

7.400%

19 Jiutong 01

2,000.0

285.7

Oct-31-2024

6.900%

19 Jiutong 03

1,000.0

142.9

Dec-05-2020

6.980%

19 Jiutong 05

2,000.0

285.7

Dec-29-2024

6.950%

16 Huaxia Note 01

2,800.0

400.0

Mar-08-2021

7.400%

16 Huaxia Note 02

2,000.0

285.7

Mar-03-2021

7.000%

16 Huaxia Note 04

3,000.0

428.6

Mar-24-2021

7.400%

16 Huaxia Note 05

2,000.0

285.7

Apr-18-2021

7.200%

16 Huaxia Note 06

4,000.0

571.4

May-12-2021

7.200%

15 Huaxia Note 05

4,000.0

571.4

Oct-22-2022

5.100%

16 Huaxia Debt

1,500.0

214.3

Jan-20-2023

4.880%

17 Xingfu MTN 01

1,900.0

271.4

May-23-2022

5.800%

18 Huaxia Note 02

525.0

75.0

May-30-2023

6.800%

18 Huaxia Note 01

2,475.0

353.6

May-30-2022

5.000%

18 Huaxia Note 03

2,000.0

285.7

Jun-20-2022

4.400%

18 Huaxia Note 06

3,000.0

428.6

Dec-20-2023

7.000%

18 Huaxia Note 04

1,300.0

185.7

Sep-10-2021

7.400%

18 Huaxia Note 07

4,000.0

571.4

Dec-20-2025

8.300%

19 Huaxia Note 01

1,000.0

142.9

Mar-25-2024

5.500%

20 Xingfu MTN 01

1,000.0

142.9

Mar-21-2025

5.500%

20 Xingfu MTN 02

500.0

71.4

Apr-18-2025

5.170%

Total Onshore Corporate Bonds

47,000.0

6,714.3

5.4x

$200M USD 9.00% Senior Notes Due 2021

1,400.0

200.0

Jun-21-2021

9.000%

$820M USD 6.50% Senior Notes Due 2020

5,740.0

820.0

Dec-21-2020

6.500%

$940M USD 9.00% Senior Notes Due 2021

6,580.0

940.0

Jul-31-2021

9.000%

$530M USD 8.625% Senior Notes Due 2021

3,710.0

530.0

Feb-28-2021

8.625%

$350M USD 7.125% Senior Notes Due 2022

2,450.0

350.0

Apr-08-2022

7.125%

$650M USD 8.60% Senior Notes Due 2024

4,550.0

650.0

Apr-08-2024

8.600%

$700M USD 8.05% Senior Notes Due 2025

4,900.0

700.0

Jan-13-2025

8.050%

$500M USD 6.90% Senior Notes Due 2023

3,500.0

500.0

Jan-13-2023

6.900%

$300M USD 6.92% Senior Notes Due 2022

2,100.0

300.0

Jun-16-2022

6.920%

Total Offshore Corporate Bonds

34,930.0

4,990.0

6.5x

Perpetuals

6,700.0

957.1



Total Perpetuals

6,700.0

957.1

6.7x

Total Debt

218,485.3

31,212.2

6.7x

Less: Cash and Equivalents

(38,608.7)

(5,515.5)

Net Debt

179,876.6

25,696.7

5.5x

Operating Metrics

US$ Amt.

LTM Reorg EBITDA

32,549.5

4,649.9


Liquidity

Plus: Cash and Equivalents

38,608.7

5,515.5

Total Liquidity

38,608.7

5,515.5

Credit Metrics

Gross Leverage

6.7x

Net Leverage

5.5x

Notes:
Sources: company filing, Reorg, Cbonds, Shanghai Stock Exchange, Wind; USDRMB exchange rate assumed to be 7.00
US$ Translation: CNY/USD rate used for USD conversion is 7.


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