Times China Plans to Repay $72M Syndicated Loans Maturing in May, October With Own Cash Resources, Starts to Allocate Onshore Funding to Prepare For Redemption of 2 Offshore Notes Due April 2022 

Management of Times China said during an investor call held today, Jan. 18, that it plans to repay its syndicated loans maturing in May and October with its own cash resources. The company faces $36 million, or 10% of the total outstanding amount of the syndicated loans, maturing in May and October respectively, according to two sources familiar with the matter. Continue reading for more insight and analysis on Times China syndicated loans from Reorg's Asia Core Credit team, and request a trial to access more actionable insights on 465+ performing, stressed and distressed credits in the region. 

It has repurchased a total of $11 million principal of its $225 million 5.75% notes due April 26 and $200 million 5.3% notes due April 20 and will consider repurchasing more notes given appropriate market conditions.

Times China started to allocate onshore funding in January to prepare for the redemption of the due April notes while the management noted that the company’s sales collectibles had been improving.

Times is facing three onshore corporate bonds maturing or putable in the second half of 2022, including RMB 1.6 billion ($251.8 million) bonds putable in August and RMB 1.1 billion bonds maturing in September.

The company has certain bank loans and trust loans maturing in 2022 with relatively small amounts while it could roll over its construction loans to cover the maturities at the project levels including its urban renovation projects.

For 2021, cash collection rate was about 70%. It recorded more than RMB 28 billion contracted sales during the fourth quarter of 2021, while most of the sales collectibles could be received during the first quarter of 2022.

The company does not have any plan to dispose of its assets in the short term while it does not have any fixed assets or investment properties offshore.

Regarding its off-the-balance sheet debts, the company said it expects to keep its guarantee amount at the same level as of June 30, 2021, about RMB 9.8 billion, which correlates to RMB 13 billion to RMB 14 billion gross debt, including 20% short-term ones. Sales collectibles from the joint venture projects would be sufficient to cover the related debt, according to the management.

Escrow Accounts

The management guided that about 30% of its funding are in pre-sales escrow accounts now while it usually kept about RMB 6 billion to RMB 7 billion cash available for use without any restrictions.

The Guangzhou municipal government had loosened the regulations on pre-sales funding since November 2021, which lowered the ratio of the minimum amount kept in escrow accounts from 10% to 6% and shortened the lock-up period of the funding by three to six months.

Urban Renovation Projects

The company had suspended the land acquisitions from the open market since the second half of 2021 while it had converted more than 700,000 sq.m. of land for its urban renovation projects during the first half of 2021 and two to three projects in the second half of 2021.

It expects to receive RMB 1.97 billion from its sale of a renovation project to the Guangzhou municipal government in the second half of 2021 while the company is more likely to receive the funding during the first half of 2022.

For its two urban renovation projects in Huizhou and Foshan, the company expects to include it in its land bank reserves and salables resources in 2022.

Below is Times China’s capital structure: