Sunac China Holdings Ltd. received bondholder approval for an extension on its domestic debt, according to people familiar with the matter, buying the developer more time to deal with its liquidity crunch amid improved policy support.
(Bloomberg) — Sunac China Holdings Ltd. received bondholder approval for an extension on its domestic debt, according to people familiar with the matter, buying the developer more time to deal with its liquidity crunch amid improved policy support.
The company’s Sunac Real Estate unit secured an agreement from debt holders to extend maturities on nine onshore notes and an asset-backed security worth about 16 billion yuan ($2.3 billion) in total, the people said, requesting not to be identified because the matter is private. Sunac offered property assets, including its mega tourism project Sunac Land, to make the deal more attractive, one of the people added.
Local media Caijing reported the news earlier on Wednesday. Sunac declined to comment.
China’s 11th-largest developer has been engulfed by a property crisis that’s dragged down growth for the world’s second-largest economy, prompting regulators to formulate a sweeping rescue plan for the industry.
The builder missed payments on offshore bonds last year and struggled to meet local debt obligations even after extending several of its domestic bonds.
A few peers including Guangzhou R&F Properties Co. and Logan Group Co. have extended all their onshore bonds as part of so-called “holistic” plans to buy the companies more time and treat all creditors fairly.
The Chinese government has ushered in a string of support measures and hinted at further aid, with outgoing Vice Premier Liu He describing the sector as a “pillar” of the economy. Beijing told financial regulators last week to help shore up the balance sheets of some “systemically important” developers, according to people familiar with the matter.
Sunac’s onshore unit last month offered to shorten its proposed note extensions, Bloomberg reported at the time. The issuer offered to cut the period for matured bonds to three years from a previously proposed three years and nine months, and to reduce the time for yet-to-mature bonds to four years from 4.5 years, the people said.
The developer unveiled a debt restructuring proposal to convert as much as $4 billion of its $9.1 billion offshore debt into ordinary shares or equity-linked instruments, and exchange the rest into new dollar bonds.
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