Easy Tactic modifies terms of exchange offer for three notes

By Marisa Wong

Los Angeles, March 14 – Easy Tactic Ltd., a subsidiary of Guangzhou R&F Properties Co., Ltd., relaunched on Thursday its exchange offer and consent solicitation for three series of notes.

The offeror, London One Ltd., has updated the terms of the exchange offers, which were originally launched on Feb. 28.

The following notes are subject to the solicitation and exchange offers:

• $1,443,307,054 outstanding 6½% cash/7½% PIK senior notes due 2025 (ISIN: XS2495355674);

• $2,460,990,567 outstanding 6½% cash/7½% PIK senior notes due 2027 (ISIN: XS2495358009); and

• $1,793,343,641 outstanding 6½% cash/7½% PIK senior notes due 2028 (ISIN: XS2495359403).

The main changes to the terms of the exchange offer are as follows:

• Increase of the initial capital call amount to £840 million from £820 million and, consequently, modification to the fixed ratio such that for each £2,100 in principal amount of tranche A1 perpetual bonds committed to subscribe for by an eligible holder, such holder is required to (i) tender $1,000 principal amount of existing notes for exchange into $1,000 principal amount of tranche B1 perpetual bonds and (ii) tender $1,000 principal amount of existing notes for exchange into $1,000 principal amount of tranche B2 perpetual bonds, where previously the fixed ratio requirement was tranche A1 £2,050 to tranche B1 $1,000 to tranche B2 $1,000;

• Increase to the loan advanced to the seller for the purpose of funding the costs and expenses for the consent solicitation and the acquisition to $30 million from $5 million;

• Revision to the timetable for the exchange offer (which was not made explicit in Thursday’s company announcement);

• Inclusion of an additional provision in the terms and conditions of the perpetual bonds from the offeror to provide updates from time to time on the progress of any disposal or pre-sales of any part or unit forming part of the property, rental or other income derived from the property and a provision that permits the offeror to elect to require the tranche C perpetual bonds to be cleared through the facilities of Euroclear/Clearstream, which will thereafter be held in global registered form by a nominee of a common depositary for the benefit of the relevant accountholders; and

• Other miscellaneous changes.

Prior amendment

On March 8, Easy Tactic made an update to its consent solicitation for the three notes, moving from consent solicitations with no fee offered to consenting holders to a payment model, as previously reported.

Consenting holders will now receive $1.00 per $1,000 note.

Conditionally, to receive payment consents need to be received by the expiration time, all meetings need to be quorate and validly held, the extraordinary resolution needs to be approved for each series by a relevant majority, the consent conditions need to be satisfied and the notes need to remain blocked before the relevant meeting.

The payment date is expected to be as soon as practicable after March 25.

Noteholders must specifically submit a valid instruction in favor, either with participation in the concurrent exchange offer or as a stand-alone instruction.

Any revocation instructions are due by 11 a.m. ET on March 18.

Recap

The exercises relate to a potential sale and substantial disposal of the property of R&F International Real Estate Investment Co. Ltd.

As previously reported, London One signed on Feb. 6 a definitive agreement to acquire R&F International for $800 million, mainly representing the acquisition of the freehold land and buildings more commonly known as Market Towers or One Nine Elms in London.

The offeror commenced two parallel exchange offers to invite eligible noteholders to tender their existing notes for new perpetual instruments issued by London One.

The exchange offers comprise an invitation to eligible noteholders to tender their existing notes for exchange into tranche B1 perpetual bonds, which are expected to be issued in a total principal amount of $400 million, and tranche B2 perpetual bonds, which are expected to be issued in a total principal amount of $400 million, and simultaneously paying cash consideration to subscribe for tranche A perpetual bonds, which are expected to be issued up to a total principal amount of £820 million, in each case issued by the offeror.

The second, separate invitation is for eligible noteholders to tender their existing notes for exchange into tranche C perpetual bonds issued by London One, which are expected to be issued up to a total principal amount of $200 million.

The tranche B1 and B2 perpetual bonds will be exchanged on a par basis. The consideration for the tranche C bonds will be in the range of $100 to $800 of tranche C bonds per $1,000 of existing notes, with the minimum consideration specified by the noteholder.

The consideration to be paid by London One for the acquisition will primarily comprise at least $800 million of the existing notes, and the purpose of the exchange offers is to acquire sufficient notes to pay proceeds and raise necessary cash proceeds to repay loans of the target, which is expected to require £820 million.

The exchange offers will expire at 11 a.m. ET on March 19.

In order for a holder to tender existing notes under the tranche A and B exchange offers, the holder must apply to become either a key investor or an investor.

Completion of the exchange offers is conditioned on passing and implementing the extraordinary resolutions under the consent solicitation and the approval of company shareholders, among other things.

Morrow Sodali Ltd. (gzrf@investor.morrowsodali.com) and Kingsway Capital Ltd. are the information agent and the exchange information agent, respectively, and Madison Pacific Trust Ltd. (mp_kyc@madisonpac.com) is the exchange agent and escrow agent for the exchange offers.

Consent solicitation

The consent solicitation seeks to amend the notes to eliminate restrictive covenants to facilitate the proposed disposal of R&F.

Consent instructions will have two voting options: to vote in favor of the consent solicitations and consider participating in the exchange offers and to vote in favor of the consent solicitations only.

The acquisition is expected to close on April 23.

The consent instructions must be received by the tabulation agent by 11 a.m. ET on March 18.

Noteholder meetings for each series will be held on March 21.

J.P. Morgan Securities (Asia Pacific) Ltd. (+852 2800 7632, +852 2800 8006 or Liability_Management_GZRF@jpmorgan.com) is the solicitation agent for the consent solicitations.

Morrow Sodali Ltd. (+44 20 4513 6933, +852 2319 4130 or gzrf@investor.morrowsodali.com) is the tabulation and information agent.

Easy Tactic is a special purpose vehicle of Guangzhou, China-based real estate developer R&F Properties.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.