China developer Yango offers to swap dollar bonds to avoid 'imminent' default

Xinyuan Real Estate Co

01/11/2021 05:07

SHANGHAI, Nov 1 (Reuters) - Chinese developer Yango Group
 000671.SZ  said on Monday it has launched an offer to exchange
some of its U.S. dollar bonds and is seeking the support of
investors to change the terms of the remaining ones to improve
its liquidity and avoid defaults.
    Yango is offering $25 in cash and $1,000 in new notes for
each $1,000 of existing bonds exchanged, it said in a statement
to the Hong Kong bourse. The exchange offer applies to its U.S.
dollar notes due in February 2023, January 2022 and March 2022,
which have an outstanding face value of $747 million.
    The company said government policy tightening, credit events
and deteriorating consumer sentiment had cut off refinancing
avenues for property firms "and put enormous pressure on our
short-term liquidity".
    It said the offer was part of "overall efforts to improve
our liquidity, preserve options to stabilize our operations as a
going concern, and avoid imminent payment defaults and potential
holistic restructurings of our debts and business operations."
    Yango's liquidity crunch comes against the backdrop of a
crisis at China Evergrande Group  3333.HK , which has stoked
concern among investors globally about the country's deeply
indebted, $5 trillion property sector and tightened funding
access for other developers.
    Evergrande narrowly avoided a catastrophic default for the
second time in a week on Friday, making a last-minute payment on
an overdue dollar bond coupon just before its grace period
expired.  urn:newsml:reuters.com:*:nL1N2RO3H1
    Yango's shares in Shenzhen plunged more than 8% in morning
trade on Monday. They have fallen by nearly a quarter in the
past five sessions. 
    Yango has eight outstanding U.S. dollar bonds worth a total
$2.24 billion and 14 outstanding yuan-denominated bonds worth
13.1 billion yuan, according to Refinitiv data. Holders of the
February 2023 notes, worth a total of $247 million, have the
option to demand early repayment on Nov. 12.
    Its March 2022 bond  CN200815785=  slumped 13% on Monday,
boosting its yield to nearly 750%, according to Duration
Finance.

 (Reporting by Andrew Galbraith; Editing by Muralikumar
Anantharaman)
 ((Andrew.Galbraith@tr.com; +86 21 2083 0079; Reuters Messaging:
andrew.galbraith.thomsonreuters.com@reuters.net ; Twitter: https://twitter.com/apgalbraith))