RiseSun offers to exchange two notes due in January and April

Chicago, Dec. 16 – RiseSun Real Estate Development Co., Ltd. is offering to exchange two series of notes due in 2022 and is also soliciting consents to amend the notes, according to an announcement.

The offer relates to the $292 million outstanding 8% senior notes due January 2022 (ISIN: XS1979285571) and $487.7 million outstanding 8.95% senior notes due April 2022 (ISIN: XS2280638607) issued by wholly owned subsidiary RongXingDa Development (BVI) Ltd. and guaranteed by RiseSun.

Exchanging noteholders who participate by the early exchange and consent deadline will receive, for each $1,000 principal amount tendered, $50 in cash as an upfront principal payment plus $25 in cash as an early cash consideration and $950 in new notes and accrued interest.

Noteholders who exchange after the early participation deadline will receive $50 in cash from the upfront principal payment, $5 in cash as a base cash consideration, $950 of new notes and accrued interest.

The new notes will be allocated in accordance with the acceptance priority level, meaning that noteholders will receive notes either with a 2024 maturity date or a 2023 maturity date.

If less than $540 million of new notes are to be issued, all of the notes will have a 2024 maturity date.

If more than $540 million of new 2024 notes are being issued, the excess will be exchanged into new notes with a 2023 maturity date. Tendering noteholders will receive a proportionate share of both 2024 notes and 2023 notes in that case.

Consenting noteholders will waive any and all rights with respect to the existing notes and will also release and discharge the company from any and all claims relating to the existing notes, including any unpaid interest.

There is a minimum acceptance amount for 85% of the notes from each series, or $248.2 million of the January notes and at least $414,545,000 of the April notes.

If the exchange offer and consent solicitation are not successful, the company may consider launching a scheme of arrangement in the British Virgin Islands pursuant to section 179A of the Business Companies Act 2004 to effect a transaction of the existing notes on terms substantially similar to the exchange offer.

To facilitate the approval of the scheme, each tendering noteholder in the exchange offer will also need to execute a creditor support agreement.

If the scheme is launched and the exchange offer has not been successful, creditors who consented or executed a creditor support agreement will need to tender all of their existing notes in favor of the exchange offer and consent solicitation, vote all of the existing notes in favor of the scheme, not object to the scheme and notify the information, exchange and tabulation agent of any change to its holdings of restricted notes.

Consenting creditors in such a case will be paid an instruction fee of 0.5% on the transaction effective date on existing notes tendered before 11 a.m. ET on Dec. 30, the instruction fee deadline.

The early exchange deadline is 11 a.m. ET on Dec. 24.

The exchange offer will expire at 11 a.m. ET on Dec. 30.

If successful, settlement will be on or around Jan. 14.

The new notes, if successful, will be listed on Jan. 17 on the SGX-ST.

Noteholders must tender their entire holding of existing notes for exchange.

Haitong International Securities Co. Ltd. is the dealer manager (project.risesun.lm@htisec.com).

Morrow Sodali Ltd. is the information, exchange and tabulation agent for the exchange offer and consent solicitation (+44 20 4513 6933, +852 2319 4130, risesun@investor.morrowsodali.com, https://bonds.morrowsodali.com/risesun).

RiseSun is a Langfang, China-based property developer. Chinese property developers have experienced a reduction in bank lending for real estate development and reduced access to onshore capital. Additionally, bank lending has been reduced for mortgage financing for buyers, resulting in reduced sales. The situation has limited the potential funding sources for the company to address the upcoming maturities on the bonds.

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