HONG KONG : Chinese property developer Yuzhou Group rolled out a plan to restructure its debt after defaulting on dollar bond payments last year, sparking a short rally in its shares and bonds on Monday.
Offshore bondholders were given three options to convert their existing debt into new notes, with the shortest tenor notes having a 70 per cent haircut. For short-term notes that have a three-year tenor and carry 6 per cent coupon, every $10 of principal would be converted into $3 of new note for senior note holders.
Yuzhou's January 2023 dollar bonds traded at 4.878 cents on the dollar on Monday, compared with 4.295 cents on Friday. Its 5.375 per cent perpetual bond traded at 3.327 cents. The company's shares soared as much as 11.8 per cent on news of the preliminary debt proposal before declining 2.6 per cent by noon. The shares have lost two-thirds of its value since December.