After Shimao Group’s $11.8bn restructuring proposal last week, more details have emerged including the possible coupons on its new restructured notes, as per sources. To quickly recall, a two-class restructuring was planned via Class A and Class B plans to repay debts over 3-8 years-

  • Under Class A, it would repay debt of $4.65bn consisting of syndicated loans and guarantee bilateral loans into new 6Y amortizing debt
  • Under Class B, it would repay $7.13bn across all public/private bonds and unguaranteed bilateral loans of $340mn via six tranches of new notes

While the amortizing schedule and maturities were mentioned, there were no details on the planned coupon rates of the new notes. In a latest update, sources note that:

  • Class A creditors would be paid down from 3-6 years and have a cash-only interest rate of SOFR+ 250bps plus an unspecified credit adjustment spread. The Class A restructured debt is to be borrowed or guaranteed by Shimao, and in some cases also guarantees by certain offshore subsidiaries
  • Class B creditors’ new bonds would amortize over 3.25-7.75 years at an interest rate of either 4.5% cash or 5.5% payment-in-kind (PIK) . Class B bonds are to be issued only by Shimao and have no guarantors, said the source.

They add that the Class A’s are to have a closer connection to onshore assets than the Class B new bonds. Another source said that the second ranking security for both classes will be over shares in the two vehicles that own its Tai Wo Ping project and two Sheraton-managed hotels and ancillary facilities in Tung Chung.


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