Bond Market News

Yesterday, Sunac China’s creditors approved the firm’s plan to restructure $9bn of its offshore debt. According to the exchange filing, 98.3% of the bondholders voted in favour of the restructuring plan. The company will seek restructuring plan’s approval by the Hong Kong court at October 5 hearing. In July, the company had won support from 87% of bondholders, but Monday’s announcement marks the plan’s formal final approval. Under the restructuring plan proposed earlier this year, a part of company’s offshore debt would be exchanged into convertible bonds backed by its Hong Kong-listed shares along with new notes with maturities of between 2-9 years.

In other news, Country Garden (COGARD) won its local bondholders’ approval for a maturity extension on its last local bond with an outstanding principal of RMB 492mn ($67mn). Last week, the company won approval from bondholders for maturity extension of its other local bonds. The total combined principal of the nine notes that were extended this month stands at RMB 14.7bn ($2bn). This provides much needed relief to COGARD to keep its liquidity intact.

Sunac and COGARD’s dollar bonds are trading at deeply distressed levels of ~9-13 cents to the dollar.