20220825-招银国际-JIAYUA_The_exchange,_consent_and_RSA_4页_468kb

CMBI Credit Commentary - JIAYUA Summary

Core Content

This document provides an overview of Jiayuan's debt restructuring plan for its 6 offshore USD bonds, with a total outstanding amount of USD1.3bn. The restructuring involves par-par exchanges to extend maturities, reduce coupon rates, and requires investors to sign a Restructuring Support Agreement (RSA) as a back-up. The plan is structured to offer incentives to investors who participate, while also providing alternative approval mechanisms if the initial threshold is not met.

Main Points

• Debt Restructuring Overview:

  • Jiayuan has announced a plan to restructure its 6 offshore USD bonds.
  • The plan includes par-par exchanges to extend maturities for 27 months.
  • Coupon rates are being reduced to 6.5% for all bonds.
  • No upfront repayment is required, but an incentive/instruction fee of 0.25 per 100 is offered.
  • The minimum acceptance level for the exchange is 90% of the outstanding amount of each bond.

• Separate Processes:

  • The exchange and consent/exchange process has an expiration date of 7 Sep'22.
  • The RSA instruction fee deadline is 8 Sep'22.
  • These are two separate processes, though participation in both is required to receive the incentive fee.

• Exchange and Consent vs. Exchange:

  • Jiayuan is seeking consent for the 4 non-default bonds, primarily to amend restrictive covenants and remove cross-default clauses.
  • The exchange is only applied to the 2 defaulted bonds: JIAYUA 11.375 10/29/22 and JIAYUA 12.5 7/21/23.

• Straight Bonds vs. CBs:

  • The USD100mn CBs due Jan'25 are not included in the restructuring plan.
  • These CBs are governed by English law and have a lower consent threshold (75%) for maturity extension.
  • Jiayuan will pursue maturity extension for the CBs separately.

Key Terms of the Debt Restructuring Plan

Additional Information

• RSA Requirements:

  • The approval threshold for the RSA is 75% of the total outstanding amount (USD1.3bn).
  • If the minimum acceptance level for the exchange is not met, the RSA will be used as an alternative.

• Legal and Regulatory Notes:

  • The report is issued by CMB International Securities Limited (CMBIS), a subsidiary of China Merchants Bank.
  • The report contains important disclosures regarding the risks and limitations of the information provided.
  • There are disclaimers for recipients in the United Kingdom, United States, and Singapore, outlining the legal and regulatory context of the report's distribution.

Contact Information

• Glenn Ko, CFA
  • Email: glennko@cmbi.com.hk
  • Tel: (852) 3657 6235
• CMBI Fixed Income
  • Email: fis@cmbi.com.hk
  • Tel: 852 3761 8867 / 852 3657 6291

Author Certification

• The author certifies that:
  • All views in the report reflect his or her personal views.
  • No compensation was directly or indirectly related to the specific views expressed.
  • There are no conflicts of interest affecting the objectivity of the report.

Disclaimer

• The report is intended for informational purposes only.
• No investment advice is provided.
• Investors are advised to consult a professional financial advisor before making any investment decisions.