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Bond Market News
China South City Launches Consent Solicitation for Notes
December 5, 2023
China South City launched a consent solicitation to extend the maturity and lower the coupons on its 9% 2024s maturing in April, June, July, October and December. It added that coupons on the July 2024s that were scheduled on November 20 were not paid, noting that it may not have enough funds to make the payment by December 20, thus triggering a default. Thus it is requesting a waiver extension until 19 July 2024. The notes were initially extended to 2024 due to the issuer’s financial difficulties. The announcement does not set out the new proposed maturities or interest rates for the notes. It will pay a consent fee of $5 for every $1,000 in principal to holders that consent before the early deadline of December 11. For those consenting after that date and before the the expiration date of December 13, it will pay $1.5 for each $1,000 in principal. It would require holders of at least 75% in principal of each of the notes to agree to consent. The above offer is an effort to improve liquidity and cashflow management and avoid a default on its notes due July 2024. Weakening sales and reduced funding access were considered the main reasons for the consent solicitation.
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