UPDATE 1: Logan Group Aims to Finalize Offshore Restructuring Plan by August; PJT Partners Engaged as Financial Advisor to Ad Hoc Bondholder Group Advised by Ropes & Gray

UPDATE 1: 5:33 a.m. ET 6/1/2022: Logan Group plans to release a restructuring plan for its offshore debt by August as bondholders were displeased with preliminary terms proposed by the company, said two sources familiar with the matter.

Continue reading for more on Logan Group's restructuring plan, and request a trial to access more reporting and actionable insights on credits in the region from Reorg's Asia Core Credit team. 

Meanwhile, an ad hoc group of the company’s offshore bondholders that counts Ropes & Gray as legal advisor has appointed PJT Partners as financial advisor, according to the same sources.

Logan Group Restructuring Plan:

The group is in contact with another group, advised by Addleshaw Goddard. Together, the groups represent a combined value of roughly $900 million of Logan’s public notes and are in discussion with holders of an additional $100 million of the notes, the sources said.

Logan Group, advised by Houlihan Lokey, is working on adjusting terms of a preliminary restructuring plan for its offshore obligations, with the goal of releasing a finalized version for both public and private notes and syndicated loans by August, according to one of the two sources and a third source familiar with the matter.

As reported, Logan contacted certain holders of its $3.4 billion public notes with a preliminary seven-year amortization plan, whose terms displeased the holders who considered the amortization term too long compared with a four-year plan for Logan’s $1.7 billion private notes.

Logan Group and PJT Partners did not respond to requests for comment.

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Original Story 6:43 a.m. UTC on April 29, 2022

Holders of Logan Group Offshore Notes Dissatisfied With Proposed 7Y Amortization; Two Groups Now Hold More Than $800M, May Join Hands to Form Ad Hoc Committee

Public bondholders are displeased with the preliminary restructuring terms proposed by Logan Group, citing the lengthy seven-year amortization term and a lack of credit enhancement, according to two sources familiar with the matter.

The Chinese developer, advised by Houlihan Lokey, has circulated among some bondholders a seven-year amortization proposal for its outstanding offshore public bonds, with 5%, 7.5%, 15%, 15%, 17.5%, 20% and 20%, respectively, being repaid every year during the amortization period, the sources said. The company has $3.37 billion in outstanding offshore public notes including $2.47 billion maturing in 2025 or earlier. Its $279 million 7.5% senior notes are due Aug. 25.

Not all public bond holders received the proposed terms, according to the sources, adding that those who received the terms have signed nondisclosure agreements with the company.

Holders of Logan’s public dollar bonds have formed two groups, respectively advised by Addleshaw Goddard and Ropes & Gray. The groups, which are in touch with each other but have not formed a formal alliance, represent a combined value of between $800 million and $900 million of Logan’s public notes, the sources said. The groups may formalize collaboration and form an ad hoc committee once the combined value reaches $1 billion, according to the sources. Both groups are open to participation from noteholders and have contacted certain institutional holders, the sources added.

In addition, Logan is proposing a four-year amortization plan for its $1.7 billion offshore private notes, with 10%, 20%, 30% and 40% paid each year, said the sources.

The public bondholder groups find the proposed amortization term too long, compared with the four-year term for private notes, with the majority of the principal payment scheduled for the last three years. Public noteholders have contacted the company, seeking to reduce the length of the amortization term and requesting the company to provide holders access to profit sharing of Logan’s subsidiaries as credit enhancement.

Logan Group declined to comment. Houlihan Lokey representatives did not respond to requests for comment.

Below is Logan's capial structure: