Corporate Debt Restructuring Masterclass

18 July 2022 (Mon), 5pm Singapore/HK time

Agile Group was downgraded to B3 from B2 and its senior unsecured ratings to Caa1 from B3, with a negative outlook. Agile’s liquidity is expected to remain “inadequate in the next 12-18 months” without new external financing, funding and timely execution of asset disposals, and weakening property sales. The developer’s unrestricted cash declined 51% YoY to RMB 22.8bn ($3.4bn) as of end-December 2021. Its cash balances are set to have dipped further after using internal resources to repay its matured debt in Q1 2022. In August, Agile has $600mn due on two of its dollar bonds and Moody’s believes that it is unlikely to use all the unrestricted cash to repay its debt at the Holdco level. This is because it has to keep a sizeable amount at the project and operating companies’ levels for operations. Contracted sales are set to fall further and its interest coverage will fall to around 2x over the next 12-24 months from 2.4x in 2021.

Agile’s dollar bonds due in August are trading between 69-72 cents on the dollar.

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