Hong Kong’s Powerlong wraps exchange offer, consent solicitation

By Devika Patel

Knoxville, Tenn., July 18 – Powerlong Real Estate Holdings Ltd. completed its exchange offer for two notes and consent solicitation for four notes on July 15, according to an announcement.

As of the expiration time of 11 a.m. ET on July 13, $178,706,000, or 89.35%, of the $200 million 4% senior notes due July 2022 (ISIN: XS2368100033) and $262,741,000, or 87.58%, of the $300 million 7 1/8% senior notes due November 2022 (ISIN: XS2078556342) were validly tendered, accepted and cancelled.

The company waived the minimum acceptance amount condition.

As a result, all conditions precedent to the exchange offer have been fulfilled, and the offer has settled.

The company issued $169,770,700 of new July 2023 notes (ISIN: XS2500700633) for the July 2022 notes and $262,741,000 of new January 2024 notes (ISIN: XS2500700716) for the November 2022 notes.

Following this, the remaining outstanding principal of the July 2022 notes is $21,294,000, and the remaining outstanding principal of the November 2022 notes is $37,259,000.

Exchange offer details

Powerlong launched the exchange offer on July 4.

For each $1,000 of July 2022 notes, the company offered $950 of new July 2023 notes, $10 in cash as an incentive fee and $50 principal repayment in cash and accrued interest.

The July 2023 notes will have a 364-day tenor and the same 4% interest rate.

For the second series, Powerlong offered to exchange November 2022 notes for a like amount of new January 2024 notes plus a $10 cash incentive fee and accrued interest.

The new January 2024 notes will have an 18-month tenor and the same 7 1/8% interest rate.

For both notes there was a minimum exchange condition, which was waived.

Originally, for the July 2022 notes, $180 million of the notes had to be exchanged, and for the November 2022 notes at least $270 million of the notes needed to be exchanged.

A partial cash redemption for the new January 2024 notes of $50 for each $1,000 principal amount will be made by Oct. 18.

The purpose of the exchange offer was to extend the company’s debt maturity profile, strengthen its balance sheet and improve cash flow management.

The new notes will be listed on the Singapore Exchange Securities Trading Ltd.

Consent solicitation

The company also solicited consents for the following notes:

• $419.6 million outstanding 6.95% senior notes due 2023 (ISIN: XS2030333384) (the outstanding principal amount not including $400,000 of notes held by the company’s affiliates);

• $500 million outstanding 6¼% senior notes due 2024 (ISIN: XS2213954766);

• $535 million outstanding 5.95% senior notes due 2025 (ISIN: XS2250030090); and

• $200 million outstanding 4.9% senior notes due 2026 (ISIN: XS2341882913).

The purpose of the consent solicitation was to amend the events of default provision in the indentures to carve out any default or event of default in respect of each series of notes as a result of a default or event of default in respect of the exchange notes.

The company previously announced it had received the necessary consents as of July 13.

Noteholders who consented were paid a consent fee of $2.50 per $1,000 note on July 15.

The consent fee and the consent solicitation had been conditioned on the receipt of the required consents for each series of notes, execution of each of the consent supplemental indentures, any laws that would prohibit implementation of the proposed amendment or the payment of the consent fee and no adverse changes to the group.

Each of the consent solicitations was an independent solicitation.

The exchange offer and the consent solicitation were not inter-conditional.

Haitong International Securities Co. Ltd. was the solicitation agent and the dealer manager (fax: +852 2840 1680).

Morrow Sodali Ltd. was the information, exchange and tabulation agent (+44 20 4513 6933, +852 2319 4130, powerlong@investor.morrowsodali.com, https://projects.morrowsodali.com/powerlongconsent, https://projects.morrowsodali.com/powerlongexchange).

The real estate company is based in Hong Kong.

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