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

Jiayuan Real Estate was upgraded to CC from C by Fitch after paying the coupons on its $200mn 12% bonds due October 2022 within the grace period that ended on June 2. Jiayuan had initially missed paying the coupon on the original date of April 30. However, despite paying the coupon, Fitch notes that the developer continues to face heightened refinancing risks and will have to rely on cash on hand and internal cash flow to address its upcoming maturities. Fitch’s estimates on Jiayuan’s latest cash balance suggest that the company may just cover the $200mn notes in October, but will not be sufficient to pay $176mn bonds due February 2023 and $295mn bonds due April 2023. Jiayuan is exploring different liquidity sources – currently one of them focuses on obtaining secured loans against two investment properties and another is a framework agreement with Jinke Smart Services Group to dispose of its entire 73.56% stake in Jiayuan Services Holdings Limited. Jiayuan’s weak sales this year until April which were down 43% YoY, despite a lower base last year, points to further stress.

Jiayuan’s 12% 2022s were trading flat at 26.5 while its other dollar bonds were trading between 11-15 cents on the dollar.

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