Sunkwan to issue $222.36 million new notes for 2022 notes, gets consents to amend 2023 notes

By Marisa Wong

Los Angeles, July 15 – China’s Sunkwan Properties Group Ltd. announced the results of its offer to exchange at least $189 million, or 90%, of its $210 million outstanding 12¼% senior notes due 2022 (ISIN: XS2363837258) held by non-U.S. persons outside the United States for new notes.

Sunkwan also announced the success of its consent solicitation to amend its $160.2 million 13½% senior notes due 2023 (ISIN: XS2417707374), according to a company announcement on Friday.

The company launched the exchange offer and consent solicitation on July 8.

Exchange offer results

The exchange offer for the 2022 notes expired at 11 a.m. ET on July 14.

Holders had tendered $209.8 million, or 99.9%, of the outstanding 2022 notes. The company has accepted for exchange all of the tendered notes.

The company offered $1,000 of new notes for each $1,000 of existing notes. The company will issue a total of $222,364,689 of new notes, including $209.8 million of new notes in exchange for the tendered existing notes and $12,564,689 of capitalized interest.

The new notes will mature on July 17, 2023 and will bear interest at 12¼%.

Payment will be made on July 18.

Listing of the new notes on the Singapore Exchange is slated for July 19.

The company had said the main purpose of the Regulation S exchange offer is to improve its overall financial condition, extend its debt maturity profile, strengthen its balance sheet and improve cash flow management.

Consent solicitation

The consent solicitation for the existing 2023 notes also expired at 11 a.m. ET on July 14.

Sunkwan obtained the necessary consents for the proposed amendments as of the consent expiration. The company plans to execute a supplemental indenture on July 15 to give effect to the proposed changes.

The company was seeking to amend the events of default provision in the 2023 notes indenture to carve out any default or event of default in respect of the 2023 notes as a result of a default or event of default occurring under the 2022 notes and to amend the insolvency events of default in line with the terms of the new notes to be issued under the exchange offer.

The exchange offer and consent solicitation were inter-conditional.

The company said that securing a successful result under the exchange offer and consent solicitation enables it to improve its overall financial condition, effectively extending its debt maturity profile and strengthening its balance sheet and improving cash flow management.

Haitong International Securities Co. Ltd. (fax: +852 2840 1680; attn.: debt capital markets) acted as solicitation agent for the consent solicitation and dealer manager for the exchange offer.

D.F. King Ltd. (+44 20 7920 9700, +852 3953 7231; sunkwan@dfkingltd.com; https://sites.dfkingltd.com/sunkwanconsent; https://sites.dfkingltd.com/sunkwan) is information and tabulation agent.

The property developer is based in Shanghai.

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