Chinese property develop CIFI Holdings announced via an exchange filing on Friday that they have made “significant progress” in “formulat[ing] a holistic solution to its current offshore liquidity situation.” Among the preliminary terms announced are:

  • No haircut expected for creditors
  • An option for some or all creditors to convert a proportion of their debt to equity or convertibles
  • An initial period where coupons will be paid as payment-in-kind to reduce its interest burden
  • Amortization of principal and maturity will be extended to a date “not anticipated to be more than 7 years” from the date of implementation of the holistic solution
  • Upfront payment in the form of partial principal repayment and/or consent fee to creditors
  • A proposal to provide creditors with an “appropriate and practical credit enhancement”

The terms are subject to change, pending discussions with creditors and its financial advisers. CIFI’s dollar bonds are trading at distressed levels of ~25 cents on the dollar.

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