UPDATE 1: Sino-Ocean Pays Coupon on $600M 6.876% Perp, Cancels Previous Deferral Notice

UPDATE 1: 6:19 a.m. ET 3/29/2023: Sino-Ocean Group has made the coupon payment originally due March 21 under its $600 million 6.876% perpetual securities, a company spokesperson said today, March 29.

Last week, the company said it decided to defer the coupon payment to preserve liquidity, as reported. However, the market reaction to the deferral exceeded the company’s expectation and Sino-Ocean said it values feedback from investors and has since paid the interest.

The company said it has kept current on all public debt and its operations are stable.

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Original Story 3:58 a.m. UTC on March 21, 2023

Sino-Ocean Defers Coupon Payment Under $600M 6.876% Perp Due Today, March 21; Deferral to Preserve Cash Flow; Perp Down 20 Pts, USD Notes Down 10 Pts

Sino-Ocean Group has decided to defer the coupon payment due today, March 21, under its $600 million 6.876% perpetual securities, according to two sources familiar with the matter and confirmation from a company spokesperson.

The perp was issued by Sino-Ocean Land Treasure III LTD while guaranteed by Sino Ocean Group.

The company noted that the deferred coupon payment does not represent any default as coupon payments under perpetals can be deferred according to the issuance terms.

Sino-Ocean Group has decided to extend the coupon payment in order to reserve its cash flow as the financing environment in the property market has yet to recover significantly.

The company also noted that it has delayed dividend payments on its stocks and coupon payment on perpetuals to ensure it can prioritize the repayment of upcoming debt maturities. It has been paying debt maturities on time while it redeemed its CNY 3 billion onshore private placement notes “21 Sino Ocean PPN002” due February 26.

Sino-Ocean Group’s $600 million 6.876% perp traded down 20 points to mid-20s and the rest of its US dollar senior notes were down as much as 10 points across the curve, according to two buysiders.