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Bond Market News
Sino-Ocean’s Restructuring Plan Approved by HK Court; Yuzhou to Miss Repayment Of 7.7% 2025s
February 20, 2025
Sino-Ocean Group has made significant progress in resolving its liquidity crisis, with a HK court approving its $6bn debt restructuring plan. This plan addresses overdue debt involving loans governed by Hong Kong law, and no creditors opposed the plan during the court hearing. The company had already secured approval from a London court for a similar restructuring of US dollar-denominated bonds. Sino-Ocean, which has major state-backed shareholders like China Life Insurance and Dajia Insurance, defaulted on loans and bonds in September 2023 due to China’s housing market crisis. Its restructuring plan includes repaying creditors with long-term bonds and a mix of new mandatory convertible notes and perpetual securities, gaining approval from most lenders, though some bondholders opposed the plan. Despite numerous creditors filing winding-up petitions, Sino-Ocean has been able to avoid a court-ordered liquidation, with a hearing on one such petition postponed to April 14.
In another update from China’s real estate sector, Yuzhou Group said that it expects to miss the principal payment on its 7.7% 2025s due on 20 February, according to an HKEX filing. The failure of payment will constitute an event of default under the notes and the other USD senior notes issued by the company.
Dollar bonds of both Sino-Ocean and Yuzhou continue to trade at deeply distressed levels of 7-8 cents on the dollar.
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