China Evergrande Group is offering three new U.S. dollar-denominated senior notes due 2021, 2023 and 2025 in exchange for four of its existing senior unsecured notes.
Specifically, the company is offering to exchange its outstanding 8.75% senior notes due 2018, 7.80% senior notes due 2019, 8.0% senior notes due 2019 and 12.0% senior notes due 2020 for the new notes.
The minimum annual interest rates on the new 2021, 2023 and 2025 notes will be 5.75%, 7.25% and 8.75%, respectively. The final rates, however, will be determined at the pricing of the company's concurrent new money issuance, which it is undertaking to refinance the group's existing debt and for general corporate purposes.
Meanwhile, the note holders will receive US$1,043.75 per US$1,000 principal amount of existing 2018 notes; US$1,060 per US$1,000 principal amount of the existing 2019 notes; and US$1,150 for each US$1,000 principal amount of the existing 2020 notes.
The holders of existing 2019 private notes can exchange their notes with any of the new notes at a negotiated principal amount.
The exchange offer stands valid until June 20 at 4:00 p.m. London time, and the new notes will be listed on Singapore Exchange Securities Trading Ltd. by June 29.
According to China Evergrande, the main purpose of the exchange offer is to extend the maturity profile of its existing foreign-currency denominated debt, improve its debt structure and lower its finance cost in order to enable itself to develop more steadily. The company added that it will not receive any cash proceeds from the offer.
Credit Suisse, China CITIC Bank International and Haitong International are the dealer managers for the exchange offer, while D.F. King will act as information and exchange agent.