Tue 06/08/2021 05:27 AM
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UPDATE 1: 5:27 a.m. ET 6/8/2021: PT Modernland Realty Tbk’s $150 million 10.75% notes due 2021 were indicated at 48/51 today, up 6-8 points following Reorg’s reporting of the “final” draft restructuring terms circulated to the noteholders, three buyside sources said. The $240 million 6.95% guaranteed senior notes due 2024 were indicated at low-40s, up from 38.5/40 on May 19.

Reorg has further reviewed the “final” draft term sheet dated June 7 and the earlier May 5 term sheet circulated by Borrelli Walsh, the financial advisor to PT Modernland Realty Tbk -- noting additional differences in details relating to the proposed up to IDR 500 billion ($~35 million) new working capital facility, limitation on liens, escrow arrangement for asset sale proceeds and the timeline associated with the granting of additional security.

These are in addition to changes in maturity, and the extent of sales proceeds to be used to fund the repurchase of new notes, as reported.

In summary the additional changes detailed in the term sheet are:
 
Items May 5 Term Sheet June 7 Term Sheet
Working capital loan
  • Up to IDR 500 billion
  • At least IDR 300 billion and up to IDR 500 billion
  • Security will have 2x value provided that assets used to secure this facility shall not include any assets secured in favour of the holders of the new notes
Limitation on liens
  • Permitted Liens shall include all existing Permitted Liens and will also include (1) the New WC Loan and (2) Permitted Notes Refinancing Indebtedness.
  • Permitted Liens shall include all existing Permitted Liens (save to the extent such existing Permitted Liens are granted or incurred in respect of Permitted Indebtedness under the indentures governing the Existing Notes, which are no longer permitted under this term sheet) and will also include all liens granted or incurred in respect of (1) the Permitted WC Loans and Permitted Refinancing Indebtedness related to the Permitted WC Loans, (2) Permitted Notes Refinancing Indebtedness, (3) Permitted Refinancing Indebtedness (provided that such Liens do not extend to or cover any property or assets of the Parent Guarantor or any Restricted Subsidiary other than the property or assets securing the Indebtedness being refinanced), and (4) other technical and statutory Permitted Indebtedness included in paragraphs (ii) to (ix) and (xi) to (xiii) of Section 4.06(b) of the indentures governing the Existing Notes which are permitted to be secured under the terms of the indentures governing the Existing Notes.
Undertaking to sell assets and escrow account
  • Proceeds from asset sales to be promptly deposited by the Parent Guarantor into an escrow account.
  • Proceeds from asset sales to be promptly deposited by the Parent Guarantor into an escrow account and in any event no later than the date falling 45 days from the date of receipt of proceeds from the relevant asset sale
Security to be Granted
  • Timeline not disclosed.
  • The Issuers and the Parent Guarantor, as the case may be, shall take all steps within 60 days after the Scheme Effective Date to ensure that any amendments to existing security and guarantees shall be completed to give effect to this term sheet, and all security shall be put in place.

Cash and PIK interests are the same as outlined in the May 5 term sheet .

The additional security of IDR 3.38 trillion to be granted in favour of holders of the new notes is the same as outlined HERE.

See Reorg’s May 7 coverage on the noteholders’ pushback on the May 5 term sheet HERE.

-- Nidhi Pandurangi, Junguang Tan
 


Original Story 3:45 a.m. UTC on June 8, 2021

BREAKING: Modernland Advisor Circulates Final Restructuring Term Sheet; Bondholder Call Scheduled June 10

Borrelli Walsh, the financial advisor to PT Modernland Realty Tbk, has circulated to holders of the company’s $150 million 10.75% notes due Aug. 2021 and the $240 million 6.95% guaranteed senior notes due 2024, “final” restructuring terms, according to a copy of the email seen by Reorg.

A bondholder call has been scheduled at 11:00 a.m. SGT on June 10, the email states.

The revised terms and previous terms circulated by the company are set out in the table below:
 
Items May 5 Term Sheet Final Term Sheet
Maturity Due 2021 Notes – June 30, 2025
Due 2024 Notes – April 30, 2028
Due 2021 Notes – June 30, 2025
Due 2024 Notes – April 30, 2027
Sales proceeds to be used in RDA 50% 75%
Other terms As per MDLN proposal dated May 5 Changes to legal wording required by Baker Mckenzie which have no commercial impact

Reorg will follow with complete details of the final restructuring proposal.

-- Nidhi Pandurangi
 
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