Wed 06/16/2021 19:05 PM
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Greenland Holdings recently sounded out market interest in an RMB 1.5 billion ($234.4 million) to RMB 2 billion-equivalent USD offshore private bond deal, which would have used a commercial plaza located in Xuhui District, Shanghai, with an appraisal value of RMB 3.303 billion as collateral, said two buyside sources familiar with the matter. Continue reading for our Asia Core Credit team's reporting on Greenland Holdings and request a trial to access legal and financial analysis of hundreds of other performing, stressed and distressed credits in the region. 

The commercial plaza is owned by Shanghai Greenland Hengbin Real Estate Co. Ltd. (上海绿地恒滨置业有限公司) and has not been previously pledged, according to a teaser provided by the sources that was seen by Reorg.

The bond would have a tenor of two years, with a put option at the end of the first year, according to the sources.

Greenland ultimately decided not to move forward with the plan due to the high cost as the yield would be around 10%, the sources said. The company is now contemplating financing with lower costs such as issuing onshore commercial mortgage-backed securities whose yields are as low as 6.5% with longer tenors, the sources added.

Greenland did not immediately respond to a request for comment.

Ownership structure of the company is shown below, according to the teaser:

 
The deal talks represent the latest attempt by Chinese real estate developers to borrow off-balance-sheet debt, albeit at higher costs than usual channels, in part to circumvent China’s “three red lines” policy. Yuzhou Group recently sounded out the market for a potential $100 million to $150 million off-balance-sheet bond offering led by Morgan Stanley as it faces repayment of at least $200 million private notes this month and towards the end of this year. The deal, if materialized, would be Yuzhou’s third private bond deal in about nine months, following offerings in September and March, respectively.

In April, fellow developer China Aoyuan Group denied that it had issued an off-balance-sheet dollar bond recently.

Below is the capitalization structure of Greenland Holdings:



















































































































































































































































































































































































Greenland Holdings Group Co Limited - Pro Forma as of 04/28/2021


03/31/2021

EBITDA Multiple

(CNY in Millions)

Amount

US$ Amt.

Maturity

Rate

Book


Bank and Other Loans

253,615.3

39,077.9



Total Bank and Other Loans

253,615.3

39,077.9

6.2x

21 Greenland 02

1,600.0

246.5

Jan-07-2024

6.500%

21 Greenland 01

1,000.0

154.1

Jan-07-2024

7.000%

21 Guangxi Construction 01

1,000.0

154.1

Mar-31-2024

5.200%

20 Guangxi Construction MTN001

1,000.0

154.1

Mar-18-2023

3.900%

20 Guangxi Construction 02

500.0

77.0

Feb-10-2023

4.400%

20 Guangxi Construction 01

1,000.0

154.1

Jan-20-2023

4.900%

17 Guangxi Construction 01

1,000.0

154.1

Sep-15-2022

6.000%

19 Guangxi Construction PPN001

1,000.0

154.1

Jul-05-2022

5.100%

20 Guangxi Construction CP001 1

-

-

Apr-10-2021

2.980%

Total Onshore Bonds

8,100.0

1,248.1

6.4x

$250 Million 7.25% Senior Notes Due 2025

1,622.5

250.0

Jan-22-2025

7.250%

$600 Million 5.875% Senior Notes Due 2024

3,894.0

600.0

Jul-03-2024

5.875%

$300 Million 6.75% Senior Notes Due 2024

1,947.0

300.0

Mar-03-2024

6.750%

$500 Million 6.75% Senior Notes Due 2023

3,245.0

500.0

Sep-26-2023

6.750%

$400 Million 6.125% Senior Notes Due 2023

2,596.0

400.0

Apr-22-2023

6.125%

$300 Million 5.9% Senior Notes Due 2023

1,947.0

300.0

Feb-12-2023

5.900%

$500 Million 6.25% Senior Notes Due 2022

3,245.0

500.0

Dec-16-2022

6.250%

$370 Million 5.6% Senior Notes Due 2022

2,401.3

370.0

Nov-13-2022

5.600%

$200 Million 5.75% Senior Notes Due 2022

1,298.0

200.0

Sep-26-2022

5.750%

$500 Million 6.75% Senior Notes Due 2022

3,245.0

500.0

Jun-25-2022

6.750%

$250 Million 6.75% Senior Notes Due 2022

1,622.5

250.0

Apr-21-2022

6.750%

$350 Million 7.25% Senior Notes Due 2022

2,271.5

350.0

Mar-12-2022

7.250%

$550 Million 5.101% Senior Notes Due 2021

3,569.5

550.0

Sep-26-2021

5.101%

$300 Million 6% Senior Notes Due 2021

1,947.0

300.0

Jul-17-2021

6.000%

Total Offshore Bonds

34,851.3

5,370.0

7.2x

Tibet Trust Perpetuals

250.0

38.5


6.940%

19 Project Construction Y2

500.0

77.0


7.000%

19 Project Construction Y1

485.0

74.7


7.000%

19 Guangxi Construction Y1

500.0

77.0


6.500%

18 Guangxi Construction Y1

800.0

123.3


7.500%

$120 Million 5.625% Perpetual Notes

778.8

120.0


5.625%

Total Perpetuals

3,313.8

510.6

7.3x

Total Debt

299,880.4

46,206.5

7.3x

Less: Cash and Equivalents

(89,932.6)

(13,857.1)

Plus: Restricted Cash

17,237.1

2,655.9

Net Debt

227,184.9

35,005.4

5.5x

Operating Metrics

US$ Amt.

LTM Reorg EBITDA

41,085.0

6,330.5


Liquidity

Plus: Cash and Equivalents

89,932.6

13,857.1

Less: Restricted Cash

(17,237.1)

(2,655.9)

Total Liquidity

72,695.5

11,201.2

Credit Metrics

Gross Leverage

7.3x

Net Leverage

5.5x

Notes:
Source: Company filings, Reorg, Wind, Cbonds; 2021E EBITDA from WIND market consensus; Restricted Cash from 2020 Annual Report
1. Repaid upon maturity
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 6.49.


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