Digital Assets in Capital Markets

Advanced course on digital assets - assets created using a blockchain/DLT network - designed for finance professionals.

IBF-STS
8 CACS CPD Hours

15 November 2022 (Tuesday) | 9am-5pm

After Chinese real estate developer Logan Group announced a payment suspension on $1.6bn of offshore bonds last week, IFR reported that the developer is unwilling to cooperate on the restructuring. The bonds in question include its $400mn 6.5% July 2023s, $300mn 5.75% January 2025s, $300mn 4.25% July 2025s, $300mn 4.7% July 2026s and a $300mn 4.5% January 2028s. The company has missed all interest payments in July on these bonds and at the end of the grace period on 7 August. Stock exchange filings mentioned that the suspension was to facilitate a liability management solution and treat all creditors fairly. Since March, Logan is struggling to manage its debt and has not yet finalized a restructuring plan. Offshore bondholders, who together hold 25% of Logan’s bond, formed a group and hired a financial adviser, PJT Partners. The group proposed their restructuring plan in July with credit enhancements, but it was rejected by the company, as per the first IFR source. They added that the developer is unwilling to cooperate and has ignored requests for information from the creditor group over the past five to six weeks. PJT asked the bondholders to not to participate in a potential exchange for the $300mn 7.5% August note, hoping for an agreement to their proposed restructuring. Logan, in a press release said that it had recently obtained banks’ consent to extend an offshore syndicated loan.

Logan’s bonds are currently trading at distressed levels of around 5-12 cents to dollar.

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