China’s Yuzhou gives exchange results; consent solicitation successful

By Mary-Katherine Stinson

Lexington, Ky., Jan. 20 – Yuzhou Group Holdings Co. Ltd.’s noteholders have tendered a total of $477,212,000 from two series of notes as part of an exchange offer, according to a notice on Thursday.

The total amount tendered for exchange represents approximately 82% of the principal amount of notes.

The total is comprised of $265,654,000 of its 2022 notes and $211,558,000 of 2022 II notes.

The company stated that due to the strong response they have decided to waive the minimum acceptance amount condition and accept all notes tendered in the exchange offer.

As previously reported, Yuzhou was offering to exchange its $340 million of 6% senior notes due 2022 (ISIN: XS1555300497) and its $242,069,000 of 8 5/8 notes due 2022 (ISIN: XS1938265474) for a $50 cash principal repayment, a $10 cash incentive and $950 of new 7.8125% notes due Jan. 21, 2023 for each $1,000 principal amount for each series of notes.

The exchange will take place on or about Jan. 20.

The offer expired at 11 a.m. ET on Jan. 19.

Yuzhou said they had been contacted by many noteholders unable to participate in the offer due to a short tender period and that they had asked the company to extend the offer to enable their participation. Although the company was unable to do so, it said it plans to relaunch the exchange offer on substantially the same terms for the remainder of the notes on approximately Jan. 26.

The company was also conducting a consent solicitation, which was successful, for the following notes:

• The $100 million 12% senior notes due 2022 (ISIN: XS2361260131);

• The $115 million 8½% green senior notes due 2022 (ISIN: XS2388913290);

• The $650 million 6% senior notes due 2023 (ISIN: XS1508493498);

• The $500 million 8½% senior notes due 2023 (ISIN: XS1945941786);

• The $179 million 9.95% senior notes due 2023 (ISIN: XS2379568004);

• The $500 million 8½% senior notes due 2024 (ISIN: XS1954963580);

• The $497 million 8 3/8% senior notes due 2024 (ISIN: XS2073593274);

• The $486 million 8.3% senior notes due 2025 (ISIN: XS2085045503);

• The $400 million 7.7% senior notes due 2025 (ISIN: XS2121187962);

• The $636.5 million 7 3/8% senior notes due 2026 (ISIN: XS2100653778);

• The $295 million 7.85% green senior notes due 2026 (ISIN: XS2215399317); and

• The $557 million 6.35% green senior notes due 2027 (ISIN: XS2277549155).

The solicitation expired at 11 a.m. ET on Jan. 19.

The company will pay a consent fee of $2.50 for each $1,000 principal amount on or about Jan. 20.

The company plans to execute the supplemental indentures to give effect to the proposed amendments and waivers on Jan. 21.

All holders and subsequent holders of each series of consent solicitation notes will be bound by the terms of the indentures as amended by the supplemental indentures governing the notes.

Under the solicitation, the company waived events of default under each note indenture, including the occurrence of an event of default that has caused the holder to declare such debt to be due and payable prior to its stated maturity and/or the failure to make a principal payment when due; and one or more final judgment or order for the payment of money in excess of $15 million rendered against it or any of its restricted subsidiaries that is not paid or discharged within 60 consecutive days.

The company also waived some past defaults, including any default under the cross-default provision or the judgment default provision of any of the indentures.

The proposed amendments excluded any of these provisions from the indentures of the 2022 notes covered by the exchange offer as cross defaults under the notes covered by the consent solicitation.

The company said it was aiming to extend its debt-maturity profile and strengthen its balance sheet via the exchange offer and to avoid certain events of default by seeking some amendments via the consent solicitation.

BOCI Asia Ltd. and Haitong International Securities Co. Ltd. were the dealer managers and solicitation agents.

Morrow Sodali (+44 20 4513 6933, +852 2319 4130 or yuzhou@investor.morrowsodali.com) was the information, exchange and tabulation agent.

Based in Shanghai, Yuzhou develops residential properties in southern China.

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