Powerlong Real Estate Holdings Limited

Event Publicly Available Information:

Has a Failure to Pay Credit Event occurred with respect to Powerlong Real Estate Holdings Limited?

The Eligible Market Participant who submitted the question provided the following information. Note that the below does not represent the views of the AEJ Determinations Committee.

The Eligible Market Participant that raised the General Interest Question requests DC to consider and determine whether a Failure to Pay Credit Event has occurred with respect to the US$200,000,000 4.0% Senior Notes due July 2022 (ISIN: XS2368100033/Common Code: 236810003) (the “Fourth 2022 Notes”) issued by Powerlong Real Estate Holdings Limited (the “Reference Entity”) pursuant to an indenture dated on or about 26 July 2021 between, among others, the Reference Entity as issuer and Citicorp International Limited as trustee (the “Indenture”).

Pursuant to the terms of the Indenture as disclosed by the Offering Circular in respect of the Fourth 2022 Notes dated 19 July 2021 (the “OC”), the Reference Entity should redeem the Fourth 2022 Notes on 25 July 2022 (the “Maturity Date”).

On 4 July 2022, the Reference Entity announced the commencement of the Exchange Offer and the Consent Solicitation of certain senior notes, which included the Fourth 2022 Notes (the “Exchange Offer”). On 14 July 2022, the Reference Entity announced that US$178,706,000 representing approximately 89.35% of the aggregate principal amount of the Fourth 2022 Notes has been validly tendered for exchange and accepted by the Reference Entity pursuant to the terms of the Exchange Offer. As a result, US$21,294,000 in aggregate principal amount of the Fourth 2022 Notes remains outstanding following the completion of the Exchange Offer.

Pursuant to the terms of the Indenture as disclosed by the OC, the outstanding US$21,294,000 in aggregate principal amount of the Fourth 2022 Notes together with the accrued interest thereon are due and payable on the Maturity Date. However, the Reference Entity failed to pay the principal and accrued interest on the Fourth 2022 Notes on the Maturity Date. On the Maturity Date, the Reference Entity announced on the Singapore Stock Exchange that it “has not paid the principal and accrued interest on the remaining non-tendered outstanding principal amount of the Fourth 2022 Notes of US$21,294,000”. Under the terms of the Indenture as disclosed by the OC, no grace period applies with respect to the payment of principal of the Fourth 2022 Notes on the Maturity Date. As of 3 August 2022, the Reference Entity has not repaid the principal and accrued interest on the Fourth 2022 Notes. The default status of the Fourth 2022 Notes can be viewed on Bloomberg and can be publicly accessed by any subscriber by running the function “XS2368100033 Corp”. The relevant default corporate action information can be viewed by running the function “CACX 231144218”.

The OC and the relevant announcements by the Reference Entity are accessible via the links set out below. Pursuant to Section 1.35(a)(ii) of the 2014 Definitions, information received from or published by the Reference Entity is Publicly Available Information.

The OC disclosed on the Singapore Exchange Securities Trading Limited (the “SGX-ST”).: https://links.sgx.com/1.0.0/prospectus-circulars/45595

Results of the Exchange Offer disclosed on SGX-ST: https://links.sgx.com/1.0.0/corporate-announcements/T27ZW59KDXKH9YRB/96f25f77470c0c788bc6d1ce60280d6780acb73d6fa2746f671c2865624c41c2

Non-payment of the principal of the Fourth 2022 Notes announced by the Reference Entity on 26 July 2022: https://links.sgx.com/1.0.0/corporate-announcements/3UVD15969RFCKCAA/4bbf9da28c8681ee0b5dd01d493ef3e866e641a61ec741004f888f579347c812

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Additional Information

Issue Number:

2022080301

Submitted by:

General Interest Question

Category:

Credit Event

Coverage Election:

2014 Definitions

Status:

Closed

Outcome:

Question Decided
Procedural History
- Closed
  
  DC Decision
  Asia Ex-Japan DC Meeting Statement – 19 August 2022
  As the Relevant Transaction 300/5 Criteria were not satisfied in respect of 2014 Transactions in respect of Powerlong Real Estate Holdings Limited (the Reference Entity), the Asia Ex-Japan DC met on Thursday 18 August 2022 to discuss whether or not an Auction should be held to settle 2014 Transactions in respect of the Reference Entity.
  The Asia Ex-Japan DC determined that no Auction will be held to settle 2014 Transactions relating to the Reference Entity and accordingly no Transaction Auction Settlement Terms will be published. 19 August 2022 (being the date the decision was announced by the DC Secretary) is the “No Auction Announcement Date” for the purposes of Section 6.11 of the 2014 Definitions.
  In relation to Physical Settlement for Standard Asia Corporate Transactions in respect of the Reference Entity, the NOPS Cut-off Date can be calculated in accordance with Section 8.10(b)(i) and Section 1.53 of the 2014 Definitions. Since the NOPS Cut-off Date would fall on 18 September 2022 pursuant to Section 8.10(b)(i), the date will be adjusted pursuant to Section 1.53 for Standard Asia Corporate Transactions using the Following Business Day Convention based on the Business Days applicable to the relevant Credit Derivative Transaction.
  8/19/2022 05:00am EDT
- Ongoing
  
  DC Decision
  Asia Ex-Japan DC Meeting Statement – 16 August 2022
  The Asia Ex-Japan DC met on Monday 15 August 2022 to discuss whether a Failure to Pay Credit Event had occurred with respect to Powerlong Real Estate Holdings Limited (the Reference Entity) due to the non-payment of the Reference Entity’s obligations under its directly-issued USD 200,000,000 4.0% Senior Notes due 25 July 2022 (the Notes).
  The Asia Ex-Japan DC considered the Publicly Available Information submitted by the Eligible Market Participant that raised the DC Question. Based on the information provided, the Asia Ex-Japan DC determined that: (i) the Notes constituted an Obligation of the Reference Entity; and (ii) the Reference Entity had failed to make payments in respect of such Obligation in excess of the Payment Requirement.
  The Asia Ex-Japan DC noted that the Notes do not provide for a grace period for the failure to pay principal at maturity and therefore the deemed Grace Period under Section 1.46(c) of the 2014 Definitions applied. Such Grace Period would have expired immediately prior to midnight on 28 July 2022. The Reference Entity’s most recent announcement, stating that it had not paid the outstanding principal of the Notes, was dated 25 July 2022 and published on the SGX website on 26 July 2022. The Asia Ex-Japan DC noted that the Reference Entity had not made any further announcements, and in particular it had not announced that it had subsequently made payment, and the Asia Ex-Japan DC did not receive any other Eligible Information (as defined in the 2014 Definitions) indicating that the relevant payment failure had been remedied. Based on the Eligible Information submitted to the Asia Ex-Japan DC (including the announcement of the Reference Entity dated 25 July 2022 and the status of the Bonds on Bloomberg) and on the basis that that no Eligible Information was received indicating that the relevant payment had been remedied, the Asia Ex-Japan DC determined that the failure to pay was not remedied within the Grace Period.
  The Asia Ex-Japan DC also considered the 2019 Narrowly Tailored Credit Event Supplement to the 2014 Credit Derivatives Definitions and concluded that there was sufficient Eligible Information to determine that the Credit Deterioration Requirement was satisfied.
  Accordingly, the Asia Ex-Japan DC concluded that a Failure to Pay Credit Event had occurred with respect to the Reference Entity and the date of the Failure to Pay Credit Event was 28 July 2022.
  The Asia Ex-Japan DC will meet again in due course to discuss settlement of 2014 Transactions in respect of the Reference Entity.
  8/16/2022 07:10am EDT
- Ongoing
  
  AEJ DC Meeting Statement - 10 August 2022
  The AEJ DC met on 10 August to commence discussions in relation to whether or not a Failure to Pay Credit Event has occurred in respect of the Reference Entity following the expiry of the applicable deemed Grace Period. The AEJ DC agreed to meet again on Monday 15 August 2022. If Eligible Market Participants are aware of Eligible Information as to the continuing status of any non-payment in respect of the relevant Notes, please contact the DC Secretary.
  DC Decision
  DC Secretary Contact Details
  8/10/2022 07:35am EDT
- Request Accepted by DC
  
  8/05/2022 09:55am EDT
- Pending DC Consent
  
  8/03/2022 07:25am EDT