20220610-招银国际-MOLAND_-_Proposed_debt_restructuring_is_a_done_deal_3页_422kb

CMBI Credit Commentary Summary

Core Content

This document is a credit commentary from CMBI Fixed Income Department regarding the proposed debt restructuring of Modern Land China. It outlines the progress of the restructuring plan, the approval status, and the estimated recovery rates for bondholders.

Key Information

• Debt Restructuring Progress:

  • As of 24 Mar'22, over 75% of bondholders in principal amount of Modern Land's USD bonds have signed the Restructuring Support Agreement (RSA).
  • This means the restructuring plan has already met the approval threshold, and the remaining steps are primarily procedural.

• Scheme Meeting and Court Approval:

  • The scheme meeting was announced for 29 Mar'22, but with the majority approval secured, it is expected to be a formality.
  • The Cayman court sanction hearing is scheduled for 5 Jul'22, and the US Bankruptcy Court will also review the plan.
  • The long-stop date for the plan is 31 Jul'22, beyond which the restructuring may not proceed.

• Recovery Rate Estimates:

  • The estimated recovery rate for existing bonds is 57–83%, based on the proposed restructuring plan.
  • Bondholders will receive USD1.7 upfront cash and the remaining USD98.3 in five tranches of new notes/bonds with maturities ranging from 1 to 5 years.
  • Bondholders who consent to the restructuring plan on or before 24 Mar'22 will also receive an RSA fee of USD0.2.
  • The recovery rate estimates exclude unpaid and accrual interests up to the expected restructuring effective date of 31 May'22.

Main Views

• The restructuring plan is likely to be approved by the majority of bondholders, making it a done deal.
• The scheme meeting and court hearings are seen as procedural steps and are expected to be approved without significant opposition.
• The recovery rates are positive but vary, depending on the discount rates assumed (15–25%).
• The CMBI Fixed Income Department provides analysis and forecasts based on publicly available information and assumes no liability for the outcomes of any investment decisions made using this report.

Important Disclosures

• The report is not investment advice and should not be relied upon for making investment decisions.
• Risks are inherent in any securities transaction, and actual results may differ materially from the report's assumptions.
• The report is intended for specific recipients, including "major US institutional investors" in the U.S., and is not for general distribution.
• Conflicts of interest may exist due to CMBIS's potential involvement in investment banking activities related to the companies mentioned.
• The information is subject to change and is provided on an "AS IS" basis.

Contact Information

• Glenn Ko, CFA – 高志和

  • Email: glennko@cmbi.com.hk
  • Tel: (852) 3657 6235

• Polly Ng – 吴宝玲

  • Email: pollyng@cmbi.com.hk
  • Tel: (852) 3657 6234

• James Wen – 温展俊

  • Email: jameswen@cmbi.com.hk
  • Tel: (852) 3757 6291

• CMBI Fixed Income Department

  • Tel: 852 3761 8867 / 852 3657 6291
  • Email: fis@cmbi.com.hk

• CMB International Securities Limited

  • CMBIS is a wholly owned subsidiary of CMB International Capital Corporation Limited, which is a wholly owned subsidiary of China Merchants Bank.

Author Certification

• The author certifies that the views expressed accurately reflect their personal views.
• No part of the author's compensation is directly or indirectly related to the views in this report.
• The author confirms that they have not traded in the stocks covered in the report within 30 days before its release, and will not trade within 3 business days after its release.
• The author has no financial interests in the Hong Kong listed companies mentioned in this report.

Disclaimer

• This document is intended for specific recipients and may not be reproduced, reprinted, sold, or published without prior written consent from CMBIS.
• UK recipients: The report is only provided to individuals falling within Article 19(5) or Article 49(2) of the Financial Services and Markets Act 2000.
• US recipients: The report is only for major US institutional investors, and distribution to others is prohibited.
• Singapore recipients: The report is distributed by CMBI (Singapore) Pte. Limited (CMBISG), an Exempt Financial Adviser regulated by the Monetary Authority of Singapore.