China Properties launches cash tender offer for 9 1/8% senior notes

By Marisa Wong

Madison, Wis., Oct. 25 - China Properties Group Ltd. announced that it has started a cash tender offer to purchase all of its $300 million outstanding 9 1/8% senior notes due 2014.

The company is also soliciting consents to proposed amendments to the indenture governing the notes that would eliminate substantially all of the restrictive covenants and certain events of default. The amendments would be effected in a third supplemental indenture.

The tender offer will expire at 11:59 p.m. ET on Nov. 22.

Holders who tender their notes on or before 5 p.m. ET on Nov. 5, the consent deadline, will receive $940 for each $1,000 principal amount of notes tendered, which includes a $12.50 early tender payment and a $12.50 consent payment.

Holders who tender their notes after the consent deadline but before the expiration date will receive only the tender offer consideration of $915 per $1,000 of notes.

The company will pay accrued interest to but excluding the payment date.

Before the consent deadline, holders may not tender notes without also giving their consents, and holders will be deemed to have delivered consents for all notes tendered before the consent deadline. After that, holders may choose to tender their notes or deliver consents, but not both.

The tender offer and consent solicitation are conditioned on a needed consents condition, a tender condition and a financing condition. A majority of holders must deliver consents for the third supplemental indenture to be executed. Prior to the expiration date, at least 60% of the principal amount must be tendered, and the company must be able to make a drawdown on its facility to fund the tender offer and consent solicitation along with available cash.

Bank of America Merrill Lynch (646 855-3401) is the dealer manager and solicitation agent.

Bondholder Communications Group, LLC (212 809-2663) is the information and tender agent.

Hong Kong-based China Properties is an investment holding company with interests in commercial properties located in Shanghai.

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