Admiralty Harbour is a credit-focused financial services firm based in Hong Kong.
Admiralty Harbour completes US$500mm bond consent solicitation for CMIG
Sep 2019
First successful Chinese USD bond restructuring by extending maturity through consent solicitation
On 6 September 2019, Admiralty Harbour acted as the Sole Solicitation Agent for China Minsheng Investment Group (CMIG) on a successful consent solicitation in favour of extending maturity date to 2 August 2020 and waiving defaults and events of default for its US$500 million 3.8% Notes due 2 August 2019.

This transaction was different from typical consent solicitations which aim to amend non-commercial terms, but instead extended the maturity date of the existing notes for one year. Such consent solicitation seeking amendment of major commercial terms is generally considered as a restructuring-like project, and required a majority in favour consisting of not less than three-quarters of the votes cast at the noteholder meeting to pass the extraordinary resolution. It was considerably challenging in terms of transaction structure design, noteholders identification and investors communication etc.

As the Sole Solicitation Agent, Admiralty Harbour comprehensively coordinated all work on this transaction. Considering the characteristics of this project, and to balance the interests of the issuer and the investors, we adjusted the structure and designed an incentive mechanism with a two-phase consent fee. We also tailored communication strategies for the issuer, which effectively managed expectations of the investors, eliminated market noise, and facilitated communication. As at the primary instruction deadline, the issuer had received consent instructions which represented approximately 76% of the aggregate principal amount of the Notes outstanding, of which, approximately 97% voted in favour of the extraordinary resolution. As at the expiration deadline, consent instructions representing more than 95% of the principal had been received, of which more than 75% were in favour of the extraordinary resolution. The Consent Solicitation was successfully passed.

This transaction is a key step in the strategic transformation for CMIG since the formation of its emergency committee, and it is of critical significance to the overall debt restructuring, asset restructuring and equity restructuring of the Group. Admiralty Harbour actively assisted and escorted the Group to complete various execution tasks with high efficiency and high quality. It took only one month from the kick-off of the project to the passing of the extraordinary resolution at the noteholder meeting, demonstrating our strong capability to execute atypical and complex liability management projects and rich experience in leveraging commercial tools to properly resolve financial distress.

About CMIG
Initiated by the All-China Federation of Industry and Commerce (ACFIC) and approved by the State Council, CMIG is an investment group founded by 59 leading private enterprises on 21 August 2014 in Shanghai with registered capital of 50 billion yuan.