China's Hong Long starts tender for 12½% notes due 2012

New York, Nov. 19 - Hong Long Holdings Ltd. said it has begun a cash tender offer and consent solicitation for its $90 million of 12½% senior notes due 2012.

The consent solicitation is to amend the note indenture to eliminate or modify substantially all of the restrictive covenants, certain events of default and other provisions in order to provide the company with increased financial and operating flexibility. The proposed changes also waive any claims with respect to the performance or non-performance of certain terms in the indenture.

Holders who tender by the consent deadline of 4 a.m. ET on Dec. 7 will receive $750 per $1,000 principal amount of the notes. The total includes an early tender payment of $30 and an early consent payment of $20.

Hong Long will also pay accrued interest up to but excluding the settlement date.

Investors can deliver consents only and receive the consent payment. Those who tender will be deemed to have delivered consents.

To make the changes, Hong Long needs consents from holders of a majority of the notes.

The tender ends at 4 a.m. ET on Dec. 21.

Funding from the tender will come from cash resources and a loan from an independent third party.

Merrill Lynch Far East Ltd. is dealer manager and Lynchpin Bondholder Management in information, consent and tender agent (+852 2526 5406 attn: Harriet Lowe or honglonginfo@lynchpinbm.com).

Hong Long is a Shenzhen, China-based property developer.

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