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China's Sino-Ocean proposes $4 bln convertible bonds in offshore debt revamp

BY Reuters | CORPORATE | 10/28/24 09:07 PM EDT

(Clarifies throughout the issuance is part of a debt restructuring proposal, not a new fundraising plan)

Oct 29 (Reuters) - Chinese property developer Sino-Ocean Group (SIOLF) said on Tuesday it planned to issue new zero-coupon, two-year mandatory convertible bonds and new interest-bearing, perpetual securities to creditors for a total value of $4.02 billion.

The state-backed company received a winding-up petition late June, filed by The Bank of New York Mellon (BK) in a Hong Kong court.

This issuance, along with new debts worth $2.2 billion, forms a part of the indebted developer's $5.64 billion offshore debt restructuring plan.

The plan, subject to creditors and courts' approval, is facing strong opposition from a key bondholder group.

Sino-Ocean (SIOLF) was one of the Chinese property firms that defaulted on offshore bonds after the country's property sector collapsed in mid-2021. (Reporting by Sneha Kumar and Clare Jim; Editing by Rashmi Aich and Subhranshu Sahu)

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In general the bond market is volatile, and fixed income securities carry interest rate risk. (As interest rates rise, bond prices usually fall, and vice versa. This effect is usually more pronounced for longer-term securities.) Fixed income securities also carry inflation risk and credit and default risks for both issuers and counterparties. Unlike individual bonds, most bond funds do not have a maturity date, so avoiding losses caused by price volatility by holding them until maturity is not possible.

Lower-quality debt securities generally offer higher yields, but also involve greater risk of default or price changes due to potential changes in the credit quality of the issuer. Any fixed income security sold or redeemed prior to maturity may be subject to loss.

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