The first successful distressed exchange offer of a Chinese developer's USD Senior Notes
On 27 March 2020, Yida China Holdings Limited (3639.HK, "Yida" or the "Company") completed the Exchange Offer and Consent Solicitation (the "Transaction”) of its US$300m 6.95% guaranteed senior notes due April 2020 (the "Existing Notes"). Admiralty Harbour acted as the sole Dealer Manager of the Transaction. This is another success of Admiralty Harbour in China Minsheng Investment Group (“CMIG”) offshore liabilities managements, following the consent solicitation of CMIG's US$500m 3.8% senior notes maturity extension in Sep 2019.
This Transaction marks the first distressed exchange offer of a Chinese developer and set a new paradigm of resolving corporate debt problem with capital market toolkits.
Since 2019, Yida had experienced rounds of credit rating downgrades by S&P, Moody’s and Fitch due to various factors. In early 2020, the epidemic of COVID-19 and global capital markets turmoil made refinancing even more challenging. Yida was struggling to solve the US$300m senior notes due Aril 2020.
Admiralty Harbour collaborated with Yida towards an innovative transaction structure which achieved balance between the Company and noteholders. The minimum acceptance threshold of 75% and the unconditional threshold of 90% were strategically set to align the interests of Company and investors. Exchange consideration comprised of an upfront cash repayment and new senior notes due 2022 puttable in Mar 2021 (the “New Notes”). Exchange on par without principal haircut and credit enhancement measures provide investors sufficient protection. Commercial terms were improved and covenants were tightened on the New Notes to make New Notes significantly more attractive, with the inclusion of a put option, which demonstrates the Company’s sincerity and encourages exchange participation.
Admiralty Harbour assisted Yida for efficient and effective negotiations with most major noteholders during offer period and achieved remarkable final acceptance rate of over 82% from 93 accounts. The Transaction solved the Company’s debt problem with capital market approach instead of the lengthy and tedious court restructuring process, which is win-win for both the Company and investors.
The challenges always distinguish Admiralty Harbour’s solid expertise. Admiralty Harbour is long-term partner of each our client, and is ready any time to provide help during sunny days and also rainy days.
About Yida China
Yida China Holdings Limited listed on the Main Board of Hong Kong Stock Exchange on 27th June 2014, is an integrated enterprise principally engaged in business park development and operation, construction, property management services, etc. As a professional business park operator, Yida has developed and operated more than 40 projects since 1998, such as Dalian Software Park, Dalian BEST City Core Area Business Park, Wuhan First City, Beijing Yida Lize Center, which converging over 80 corporate customers and business partners Global Fortune 500 enterprises included, together with our extensive experience in developing and operating business parks, forming our distinctive business model and competitive edge.