By Mary-Katherine Stinson
Lexington, Ky., March 26 – China Aoyuan Group Ltd. sold $2.1 billion of new securities, according to a listing particulars document dated March 20.
The company issued $500 million of 5½% senior secured notes due 2031 and $1.6 billion of senior perpetual capital securities.
The senior secured notes are secured by the custodian account and the Healthy Life shares attached to that account.
The 2031 notes will be payable entirely in paid-in-kind interest, unless the company gives written notice of its intention to pay in cash.
The maximum amount of PIK interest that may be issued under the 2031 notes’ indenture is up to $275 million. The maximum principal amount of the 2031 notes, after considering the maximum PIK interest, is up to $775 million.
The senior perpetual capital securities bear interest as follows: no interest in years one through eight after the reference date; 1% interest for years nine and 10; 2% interest for years 11 to 12; 3% interest for years 13 to 14; 5% interest for years 15 to 16; 7% interest for years 17 to 18; 9% for years 19 to 21; and an increase of 3% per year for years 22 and after.
The company may call the perpetuals in their entirety due to a withholding tax event, an equity disqualification event or a step up distribution event if the Add Hero notes and 2031 notes have been fully repaid, redeemed or repurchased.
Aoyuan may use any other net proceeds to make an offer to purchase the 2031 notes and perpetuals by way of a reverse Dutch auction, capped at the then-accumulated amount of the proceeds, at a purchase price per $1.00 of notes of no less than the minimum purchase price. The 2031 notes are not redeemable until the Add Hero notes are fully repaid. The perpetuals are not callable until the Add Hero notes and the 2031 notes are fully repaid.
Formerly China Aoyuan Property Group Ltd., the investment holding company is based in Guangzhou, China.
| Issuer: | China Aoyuan Group Ltd.
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| Amount: | $2.1 billion
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| Trustee: | Madison Pacific Trust Ltd.
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| Settlement date: | March 18
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| Listing date: | March 26
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| Distribution: | Regulation S, Rule 144A, Regulation D
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| 2031 secured notes
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| Amount: | $500 million
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| Issue: | Senior secured notes
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| Maturity: | 2031
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| Coupon: | 5½%
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| Call features: | Mandatory redemption if the Healthy Life proceeds designated account is over $20 million; optional redemption with any other net proceeds if the Add Hero notes are fully repaid
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| ISIN: | XS2785302642, XS2785302998, XS2785303020
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| Perpetuals
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| Amount: | $1.6 billion
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| Issue: | Senior perpetual capital securities
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| Maturity: | Perpetual
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| Coupon: | No interest through year eight; starting at 1% in year nine and stepping up by 1% annually through year 14; starting at 5% in year 15 and stepping up by 2% annually through year 21; stepping up annually by 3% beginning in year 22
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| Call features: | Due to a withholding tax event, an equity disqualification event or a step up distribution event if the Add Hero notes and 2031 notes have been fully repaid
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| ISINs: | XS2785326070, XS2785326153, XS2785326237
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