China Evergrande has unveiled details of its offshore debt restructuring. As part of the process, it provided two options for creditors to choose from:
- Option 1: Replace existing debt with new bonds and extend the maturity by 10-12 years
- Option 2: (a) Replace existing debt with new bonds and extend the maturity by 5-9 years, (b) Swap offshore debt into new equity-linked instruments that will be converted into shares of Evergrande Property Services, China Evergrande NEV, or China Evergrande itself. It would be mandatory for the new bonds to be exchanged into shares of the corresponding listed firm at maturity (c) Combination of both.
If the restructuring plan is not approved and the developer is forced to liquidate, the recovery rate would be in the range of 2.09-9.34% it added. Evergrande said that it hoped the plan will incentivize its onshore creditors to reach agreements with the company.
Evergrande’s dollar bonds were trading slightly weaker at 6-9 cents on the dollar.
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