SOVEREIGN DEBT RESTRUCTURING | MASTERCLASS

A deep dive masterclass on sovereign debt restructuring, to be conducted virtually by Asian high yield bond expert Florian Schmidt.

30 June 2022 (Thu), 5pm Singapore/HK time

Agile Group was downgraded to BB- from BB by S&P and the senior unsecured notes it guarantees to B+ from BB-. S&P said that the weak market confidence in Agile and the whole sector will limit the its access to offshore capital markets thereby making it rely on internal cash flow and onshore bank loans to meet debt maturities. Financially, Agile had short-term debt of RMB 39.5bn ($6.2bn) and only a slightly higher buffer with unrestricted cash of RMB 46.5bn ($7.3bn). While the developer still has access to offshore banks, this will be mainly for refinancing purposes with. Also, offshore bank loans to the company are expected to decline to their tightening stance on the property sector. S&P expects Agile to conduct minimal land acquisitions thereby helping address near-term debt maturities. S&P adds that a slowdown in cash collection in the coming years and its relatively weak disclosure and transparency standards add to its risks.

In related property market credit rating news, Kaisa Group was downgraded to Ca and CCC- by Moody’s and S&P respectively, following Fitch’s downgrade to CCC- on November 10.

Agile’s dollar bonds are higher with its 7.75% Perp up 5.4 points to 46.75 cents on the dollar.

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