YUEXIU Property Company on Friday said it plans to repurchase for cash all its US$350 million fixed-notes that are due 2018. The debt from the Hong Kong-based company has a 3.25 per cent coupon.
The debt will be repurchased at a yet-to-be determined price. The repurchase spread - the difference between a note's rate of return against a benchmark - will be kept within the limit of 160 to 190 basis points. The reference benchmark is, for now, the US T-bill due June 30, 2018, which is currently yielding about 0.625 per cent, according to the regulatory filing.
"The company will pay for each US$1,000 in aggregate principal amount in respect of the 2018 notes validly tendered for purchase and accepted by it, together with any consent fee and accrued interest, a repurchase price as calculated using the repurchase spread determined pursuant to a modified Dutch auction procedure," it said.
This auction structure allows the note holders to specify, within a given range, a price at which they would sell their notes. The purchase price is determined at the lowest price at which the maximum number of notes can be repurchased.
A meeting for the note holders will be held on Aug 9, 2016 at 9 am.
DBS Bank is the sole structuring adviser.