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

Ronshine China was downgraded to B from B+ by Fitch, with a negative outlook reflecting uncertainty over its refinancing of significant offshore and onshore bond maturities up to 2022, due to capital-market volatility and tight funding conditions. Ronshine has RMB 20.2bn ($3.2bn) of bonds maturing or turning puttable from now to end-2022. As of end-September 2021, it had RMB 23bn ($3.6bn) in cash, enough to cover the near-term maturities. However, 60% of its cash is at the project level and may not be available quickly to repay debt. Fitch expects its business profile to weaken as its land bank quality could deteriorate if it cuts land premium significantly. Besides, its margin recovery is also uncertain. On the positive side, Ronshine will release attributable sellable resources of RMB 34.7bn ($5.4bn) in Q4 and its leverage is expected to stay stable at 45-50% over the next two years.

Ronshine’s dollar bonds are lower with its 10.5% 2022s down 9.8 points to 50.45.

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