Guorui Properties accepts $300.6 million 13½% notes for exchange

By Taylor Fox

New York, Jan. 21 – China’s Guorui Properties Ltd. announced the results of its offer to exchange $455 million principal amount outstanding of 13½% senior notes due 2022 for new notes and the related consent solicitation to amend the notes.

As of the extended tender expiration deadline of 11 a.m. ET on Jan. 20, $300.6 million, or 66.8%, of the outstanding notes, were tendered and accepted for exchange.

As of the same deadline, holders of $32.55 million, or 7.23%, of the notes submitted consent-only instructions.

The aggregate amount of the existing notes for which consents were delivered was $333.15 million, or 74.03% of the total amount outstanding. Accordingly, the company has received the consents necessary to amend the existing notes.

The company plans to execute a supplemental indenture on or about Jan. 25 to give effect to the proposed amendments.

Guorui expects to issue on or about Jan. 25 $323,745,000 of new notes maturing Jan. 25, 2024.

As announced on Jan. 12, holders will receive $1,077.041 of new notes and cash in lieu of any fractional amount of the new notes not issued for each $1,000 principal amount of existing notes tendered.

The interest rate of the new three-year notes is 14¼%. The new Regulation S notes are putable after 15 months at par plus accrued interest.

The company said it is refinancing the existing notes to improve its debt structure, extend its debt maturity profile, strengthen its balance sheet and improve cash flow management.

Fitch Ratings Ltd., which rated the new notes B-, said the rating reflects uncertainty over the refinancing arrangement of the 2022 notes, which are putable in February. The rating agency also said that if the offshore debt is not successfully refinanced it will lead to a multiple-notch downgrade of Guorui ratings.

Haitong International is dealer manager of the exchange, and D.F. King is the information, tabulation and exchange agent. Haitong International is also acting as sole global coordinator, lead manager and bookrunner of the new money issuance.

The homebuilder is incorporated in the Cayman Islands under the name Glory Land Co. Ltd. and is based in Beijing.

© 2015 Prospect News.
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