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Bond Market News
Tsinghua Unigroup Bondholders Demand Freeze on Offshore Assets
March 22, 2021
Offshore bondholders of China’s Tsinghua Unigroup, the chipmaker that defaulted on local bonds last year, are seeking a freeze on the company’s foreign assets to prevent the sale of those assets to prioritize payments to local bondholders. The company’s default on CNY 1.3bn ($199mn) worth of onshore bonds on November 16 last year triggered a cross default on its $1.05bn 4.75% bonds due 2021, $750mn 5.375% bonds due 2023 and $200mn 6.5% bonds due 2028. Tsinghua Unigroup is backed by prestigious state-owned institute Tsinghua University. The asset freeze has been requested by a group of lawyers representing a Hong Kong-based group of bondholders, as per FT. A person familiar with the matter said, “If we manage to do that, then those [assets] shouldn’t go into the onshore restructuring.” The company, led by chair Zhao Weiguo, has made several high-profile investments in foreign assets during his tenure including its $2.6bn acquisition of France’s Linxens in 2018 and its $2.3bn stake purchase of HP’s H3C in 2016. Tsinghua’s 5.375% 2023s and 6.5% 2028s are trading at ~30 cents on the dollar on the secondary markets.
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