Hong Kong’s Yuexiu Property begins tender offer for 3¼% notes due 2018

By Angela McDaniels

Tacoma, Wash., July 15 – Yuexiu Property Co. Ltd. began a modified Dutch auction tender offer and a consent solicitation for its $350 million 3¼% notes due 2018, according to a company announcement.

Pricing will be set at 9 p.m. ET on Aug. 7 using a repurchase spread determined through a modified Dutch auction procedure.

Noteholders who tender may submit either a competitive offer or a non-competitive offer, and the minimum offer is $200,000 principal amount of notes.

The reference security is the 0.625% U.S. Treasury due June 30, 2018. The minimum repurchase spread is 160 basis points, and the maximum repurchase spread is 190 bps.

The company will also pay accrued interest.

The early consent deadline is 11 a.m. ET on July 29. The expiration time is 11 a.m. ET on Aug. 5, and the settlement date is expected to be Aug. 12.

After the expiration date, the company will decide what amount of notes it will accept for repurchase and select the highest repurchase spread that will enable it to purchase the acceptance amount. It will not accept for purchase any notes tendered at offer spread less than the selected repurchase spread.

If the amount of notes tendered exceeds the acceptance amount, non-competitive offers will be accepted first.

Notes repurchased in the offer will be canceled.

Consent solicitation

The company is soliciting consents to amend the terms and conditions of the notes to give it the option to redeem all, but not some only, of the notes that remain outstanding following the tender offer at a redemption price of par plus accrued interest.

The company is offering an early consent fee of $5.00 per note for consents given by the early consent deadline and an ordinary consent fee of $2.50 per note for consents given after the early consent deadline but prior to the expiration time.

Noteholders can participate in the consent solicitation without submitting their notes for repurchase.

Noteholders will vote on the proposed amendments at a meeting at 9 p.m. ET on Aug. 8.

Noteholders include Chong Hing Bank Ltd., a connected person of the company. Chong Hing Bank holds $30 million principal amount of notes.

DBS Bank Ltd. (liabilitymgmt@dbs.com) is the structuring adviser. Chong Hing Bank Ltd. and DBS Bank Ltd. are the joint dealer managers. D.F. King Ltd. (+44 20 7920 9700, +852 3953 7230, yuexiu@dfkingltd.com or https://sites.dfkingltd.com/yuexiu/) is the tender and tabulation agent.

Yuexiu is a property developer based in Hong Kong.

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