Central China Real Estate (CCRE) was downgraded to RD from C upon the completion of its exchange offer and consent solicitation. As part of the exchange offer, CCRE decided to accept: $237.275mn in principal of its 7.25% April 2023s, $348.013mn of its 7.65% August 2023s and $173.165mn of its 7.9% November 2023s. For the above, it paid a consent fee of $5 per $1,000 in principal. Its consent solicitation focused on carving out any defaults and cross-defaults as it did not expect to be able to make timely repayments for the above notes as they matured. For this, they paid a consent fee of $2.50 per $1,000 in principal. Given that the transaction was necessary to avoid default, Fitch said that the downgrade was in-line with its criteria for treating such distressed transactions.

Central China’s dollar bonds are trading at distressed levels of 17-22 cents on the dollar.

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