Thu 04/28/2022 05:30 AM
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Sunac China is contemplating whether to file a potential default notice to the China Securities Regulatory Commission in early May as its weak liquidity position may challenge its ability to deal with its upcoming debt maturities, according to two sources familiar with the matter.

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Developers were asked to communicate potential defaults or non-payments to the regulatory department in advance of any actual default incident, said the same two sources.

Sunac missed a coupon payment of around $29.5 million due April 11 on its $742 million 7.95% notes due Oct. 11, 2023 while it earlier told investors it intends to cure the missed coupon payment within the 30-day grace period.

As part of its refinancing effort, Sunac is negotiating with an offshore bank to raise funding and as part of that loan was planning to pledge its shares in its property management subsidiary Sunac Services Holdings, said the first source familiar with the matter and a third source familiar with the matter.

The company was planning to use the potential funding to repay debt but it is unclear now whether the financing transaction will materialize, said the two sources.

Meanwhile, Sunac was planning to release an extension plan for its offshore private notes but it has yet to release any details, according to the first source and the third source.

Some of Sunac China’s offshore private notes became putable immediately in mid-March after the company was downgraded to B- by S&P Ratings due to the acceleration of payment provisions.

Onshore, holders of the company’s subsidiary Sunac Real Estate Co.’s RMB 4 billion ($610 million) putable April 1 corporate bond “20 Sunac 01” earlier approved the company’s extension proposal.

The proposal entails extending the principal payment for 18 months and then repaying 10% principal on May 15, 10% on June 30, and then 15% quarterly principal payment starting from Sept. 30 until June 30, 2023, and 20% on Sept. 30, 2023, as reported.

Sunac China declined to comment.

Below is Sunac China’s capital structure:


 
















































































































































































































































































































































































Sunac China Holdings - Pro Forma as of 08/31/2021


06/30/2021

EBITDA Multiple

(CNY in Millions)

Amount

US$ Amt.

Maturity

Rate

Book


Secured bank and other borrowings

222,157.7

34,178.1



Unsecured bank and other borrowings

5,909.4

909.1



Total Bank and Other Borrowings

228,067.1

35,087.2

3.5x

$650 Million 7.35% Senior Bonds Due 2021

-

-

Jul-19-2021

7.350%

$600 Million 7.25% Senior Bonds Due 2022

3,900.0

600.0

Jun-14-2022

7.250%

$600 Million 7.95% Senior Bonds Due 2022

3,900.0

600.0

Aug-08-2022

7.950%

$450 Million 8.35% Senior Bonds Due 2023

4,225.0

650.0

Apr-19-2023

8.350%

$600 Million 6.50% Senior Bonds Due 2023

3,900.0

600.0

Jul-09-2023

6.500%

$750 Million 7.95% Senior Bonds Due 2023

4,875.0

750.0

Oct-11-2023

7.950%

$650 Million 7.50% Senior Bonds Due 2024

4,225.0

650.0

Feb-01-2024

7.500%

$600 Million 5.95% Senior Bonds Due 2024 1

6,123.0

942.0

Apr-26-2024

5.950%

$500 Million 6.65% Senior Bonds Due 2024

4,030.0

620.0

Aug-03-2024

6.650%

$400 Milllon 6.8% Senior Bonds Due 2024

2,600.0

400.0

Aug-03-2024

6.800%

$750 Million 6.5% Senior Bonds Due 2025

4,875.0

750.0

Aug-03-2024

6.500%

$400 Million 7.00% Senior Bonds Due 2025

3,900.0

600.0

Jul-09-2025

7.000%

$500 Million 6.50% Senior Bonds Due 2026 1

3,900.0

600.0

Jan-26-2026

6.500%

Total Offshore Notes

50,453.0

7,762.0

4.3x

16 Rong Chuang 06

-

-

Aug-16-2021

6.500%

18 Rong Chuang 01 2

-

-

Aug-28-2021

6.000%

18 Rong Chuang 03

960.0

147.7

Oct-09-2021

7.500%

16 Rong Chuang 05

1,440.0

221.5

Jun-13-2022

7.000%

16 Rong Chuang 01

3,511.0

540.2

Jan-22-2023

6.800%

16 Rong Chuang 07 3

2,800.0

430.8

Aug-16-2023

4.000%

20 Rong Chuang 03 4

1,300.0

200.0

Sep-11-2023

6.480%

20 Rong Chuang 01 5

4,000.0

615.4

Apr-01-2024

4.780%

21 Rong Chuang 01 6

1,580.0

243.1

Jan-19-2025

6.800%

21 Rong Chuang 03 7

2,000.0

307.7

Apr-02-2025

7.000%

20 Rong Chuang 02 8

3,300.0

507.7

May-27-2025

5.600%

21 Rong Chuang 04 9

600.0

92.3

Jun-29-2025

7.000%

Total Onshore Bonds

21,491.0

3,306.3

4.7x

Leases

651.8

100.3



Total Leases

651.8

100.3

4.7x

Total Debt

300,662.9

46,255.8

4.7x

Less: Cash and Equivalents

(119,539.5)

(18,390.7)

Plus: Restricted Cash

22,087.6

3,398.1

Net Debt

203,211.0

31,263.2

3.2x

Plus: Market Capitalization

56,467.9

8,687.4

Enterprise Value

259,678.9

39,950.6

4.0x

Operating Metrics

US$ Amt.

LTM Reported EBITDA

64,345.6

9,899.3


Liquidity

Plus: Cash and Equivalents

119,539.5

18,390.7

Less: Restricted Cash

(22,087.6)

(3,398.1)

Total Liquidity

97,451.9

14,992.6

Credit Metrics

Gross Leverage

4.7x

Net Leverage

3.2x

Notes:
Sources: Reorg, Wind, company filings; Note: RMB 46.5Bn due to JVs, assocs, RMB 42.4Bn off b/s guarantee to JVs, assocs; NCI: RMB 79.9Bn
1. Issued on January 26, 2021
2. Puttable date: 24-Jan-20222
3. Puttable date: 16 Aug-2022
4. Puttable date: 11-Sep-2022
5. Puttable date: 1-Apr-2022
6. Puttable date: 19-Jan-2023
7. Puttable date: 2-Apr-2023
8. Puttable date: 27-May-2023
9. Puttable date: 29-Jun-2023
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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