China Water Property solicits consents to amend 12½% notes due 2016

By Marisa Wong

Madison, Wis., Nov. 24 – China Water Property Group Ltd. announced a consent solicitation for its HK$600 million 12½% senior notes due 2016.

The company is soliciting consents to amend the trust deed and terms and conditions of the notes for flexibility to develop its infrastructure business.

Specifically, the amendments would

• Affect financial covenants by deleting existing and adding in new benchmark financial ratios;

• Permit the company to make separate use of an exception to the limitation on restricted payments below a set amount;

• Permit the company to incur additional permitted debt with respect to certain intangible assets, inventories or receivables and incur additional permitted liens with respect to liens for certain intangible assets, inventories and receivables; and

• Permit the company to allocate the use of proceeds from the notes to projects other than existing and new property projects and general corporate purposes, namely two exclusive natural gas projects and new permitted businesses.

These amendments constitute a single proposal. A consenting holder must consent to the proposed changes in their entirety.

The amendments require consents from holders of a majority in principal amount of the outstanding notes.

The company is offering to pay a consent fee of HK$250 for each HK$100,000 principal amount.

The consent solicitation expires at 11 a.m. ET on Dec. 8.

Jefferies Hong Kong Ltd. (Asia.DCM@jefferies.com) is the solicitation agent. D.F. King & Co. Inc. (chinawater@dfking.com; +44 207 920 9700 or 212 269-5550) is the tabulation and information agent.

The property developer is based in Hong Kong.

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