Wed 01/05/2022 07:56 AM
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Chinese real estate developer Yuzhou Group has engaged Haitong International to launch a liability management exercise for two due January 2022 notes, including $242 million 8.625% notes due Jan. 23 and $337 million 6% notes due Jan. 25, said two sources familiar with the matter. Continue reading for Reorg's Asia Core Credit team's reporting that Yuzhou Group financial advisor has been confirmed, and request a trial to access reporting and analysis on hundreds more stressed, distressed and performing credits. 

The company has proposed certain preliminary terms to gather feedback from noteholders, including offering certain upfront cash and extending maturities by eight to 12 months via an exchange offer, said the sources.

The proposed terms, which are still preliminary and subject to changes after feedback, do not include any credit enhancement, according to the sources.

Yuzhou will provide more details next week and is negotiating the proposed terms with certain large holders in private conversations, the sources added.

A source with direct knowledge of the matter said that the proposed terms include a 5% to 7.5% upfront cash payment and a threshold of 90% for passing the exchange offer.

The company also plans to extend other private notes maturing in 2022 and its $120 million 8.5% notes due Sept. 22, 2022, but may initiate the extension negotiations via other financial advisors or conduct negotiations itself, said the third source.

During a conference call on Oct. 20, company management said it planned to use proceeds from an issue of $320 million notes in September 2021 and onshore cash on hand to repay the due January 2022 notes, as reported.

In November, Yuzhou used its internal resources to repay an outstanding $100 million private bond due Nov. 19, as reported.

The company’s November 2021 contracted sales went down 25% versus the year earlier to RMB 7.518 billion ($1.18 billion), and the corresponding gross floor area sold declined by 43% year over year. Contracted sales during the first 11 months of last year edged down slightly over the year earlier period to RMB 98.613 billion, and the corresponding GFA sold was down by 18.1% year over year. December and full-year 2021 contracted sales numbers were not available.

Yuzhou Group declined to comment.

Below is Yuzhou’s capital structure:










































































































































































































































































































































































Yuzhou Group Holdings - Pro Forma as of 03/30/2021


12/31/2020

EBITDA Multiple

(CNY in Millions)

Amount

US$ Amt.

Maturity

Rate

Book


Bank Loans & Other Borrowings 1

19,042.4

2,929.6



Total Bank Loans & Other Borrowings

19,042.4

2,929.6

NM

20 Haitian 1A

750.0

115.4

Jul-14-2022

5.280%

20 Haitian 1C

53.0

8.2

Jul-14-2022

-

20 Haitian 1B

240.0

36.9

Jul-14-2022

6.000%

Total Onshore ABNs

1,043.0

160.5

NM

18 Yuzhou 04

800.0

123.1

Sep-25-2021

5.980%

18 Yuzhou 03

1,200.0

184.6

Sep-25-2021

5.980%

18 Yuzhou 01

1,000.0

153.8

Aug-29-2021

5.980%

19 Yuzhou 02

1,500.0

230.8

Apr-03-2024

7.500%

19 Yuzhou 01

2,000.0

307.7

Apr-03-2024

6.500%

20 Yuzhou 01

1,500.0

230.8

Jul-24-2025

6.500%

20 Yuzhou 02

1,500.0

230.8

Sep-15-2025

6.500%

Total Onshore Bonds

9,500.0

1,461.5

NM

$375M 6.375% USD Senior Bonds Due 2021

2,081.0

320.2

Apr-2021

6.375%

$352M 7.900% USD Senior Bonds Due 2021

2,288.0

352.0

Apr-2021

7.900%

$242M 8.625% USD Senior Bonds Due 2022

1,573.0

242.0

Dec-2021

8.625%

$350M 6.000% USD Senior Bonds Due 2022

2,275.0

350.0

Dec-2021

6.000%

$500M 8.500% USD Senior Bonds Due 2023

3,250.0

500.0

Jan-2023

8.500%

$400M 6.000% USD Senior Bonds Due 2023

2,600.0

400.0

Sep-2023

6.000%

$250M 6.000% USD Senior Bonds Due 2023

1,625.0

250.0

Sep-2023

6.000%

$500M 8.500% USD Senior Bonds Due 2024

3,250.0

500.0

Jan-2024

8.500%

$500M 8.375% USD Senior Bonds Due 2025

3,250.0

500.0

Sep-2024

8.375%

$400M 7.7% USD Senior Bonds Due 2025

2,600.0

400.0

Jan-2025

7.700%

$500M 8.300% USD Senior Bonds Due 2025

3,250.0

500.0

Apr-2025

8.300%

$400M 7.700% USD Senior Bonds Due 2025

2,600.0

400.0

Jan-2025

7.700%

$40M 7.500% USD Senior Bonds Due 2021

-

-

Dec-2020

7.500%

$645M 7.375% USD Senior Bonds Due 2026

4,192.0

644.9

Dec-2025

7.375%

$300M 7.875% USD Senior Bonds Due 2026

1,950.0

300.0

Jul-2026

7.875%

$562M 6.35% USD Senior Bonds Due 2027

3,653.0

562.0

Dec-2026

6.350%

Total Offshore Bonds

40,437.0

6,221.1

NM

$300M 5.375% Perpetual Notes

1,950.0

300.0


5.375%

Total Offshore Perpetuals

1,950.0

300.0

NM

Total Debt

71,972.4

11,072.7

NM

Less: Cash and Equivalents

(37,816.8)

(5,818.0)

Plus: Restricted Cash

2,743.2

422.0

Net Debt

36,898.8

5,676.7

NM

Operating Metrics

US$ Amt.

LTM Reorg EBITDA

(987.5)

(151.9)


Liquidity

Plus: Cash and Equivalents

37,816.8

5,818.0

Less: Restricted Cash

(2,743.2)

(422.0)

Total Liquidity

35,073.6

5,395.9

Credit Metrics

Gross Leverage

NM

Net Leverage

NM


Notes:
Sources: Company filings, Wind, Reorg
1. Excluding onshore ABNs issued by property management subsidiary
US$ Translation: CNY/USD rate used for USD conversion is 6.5.


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