Article/Intelligence
UPDATE 5: Fosun International Prices $300M 8.5% 3.5NC2 SUNs at Par
Tue Nov 12, 2024 08:21 PM ET: Fosun International Ltd. has priced $300 million 8.5% 3.5-year non-call two-year senior notes at par, according to terms seen by Octus.
The notes, which will be issued by Fortune Star BVI Ltd. and guaranteed by Fosun, will mature on May 19, 2028; they become callable at 104.25 from Nov. 19, 2026 to Nov. 18, 2027, and at 102.125 on or after Nov. 19, 2027, the terms show.
Proceeds are to refinance some of the company’s existing offshore indebtedness including any payment in connection with a concurrent offer to purchase its $700 million 5.95% due October 2025 notes at 99.5, and for working capital and general corporate purposes, according to the terms.
Settlement is on Nov. 19.
UPDATE 4: FPG at 8.5% for Fosun International’s ~$300M 3.5NC2 SUNs; Books Over $1.2B
Tue Nov 12, 2024 05:59 AM ET: Final price guidance has been set at 8.5% for Hong Kong-listed Chinese conglomerate Fosun International Ltd.’s proposed $300 million capped 3.5-year non-callable two-year Reg S senior unsecured notes issue, according to terms seen by Octus.
Orderbooks have exceeded $1.2 billion as of around 18:40 p.m. Hong Kong time, today, Nov. 12, a deal update sent by bookrunners seen by Octus shows.
Timing for the new issue is today’s business, according to the terms.
UPDATE 3: Books Over $1.1B for Fosun International’s ~$300M 3.5NC2 SUN Offering
Tue Nov 12, 2024 03:33 AM ET: The orderbooks have exceeded $1.1 billion for Hong Kong-listed Chinese conglomerate Fosun International’s $300 million capped 3.5-year non-callable two-year Reg S senior unsecured notes offering as of around 4:10 p.m. today, Nov. 12, according to a deal update sent by bookrunners seen by Octus.
Fosun is in the market today for the up-to $300 million new notes issue to fund a concurrent tender offer for some of its $700 million, 5.95% due October 2025 notes at 99.5, as reported. The initial price guidance for the proposed new notes is 8.875%-area. The maximum acceptance level for the tender is the new issuance amount.
Fosun told investors on a bond offering marketing call this morning that it plans to repay the remaining of the $700 million 5.95% due 2025s with proceeds from unspecified asset disposals.
UPDATE 2: Fosun Says Asset Sales To Be Used to Repay Remaining 5.95% Due 2025 Bonds Post Tender and Up-To $300M New Issue; Starts Refi Talks for Offshore Syndicated Loan Due 2025
Tue Nov 12, 2024 01:48 AM ET: Hong Kong-listed, Chinese conglomerate Fosun International Ltd. told investors on a bond offering marketing call this morning, Nov. 12, that it plans to repay the remaining of its $700 million, 5.95% due October 2025 notes with proceeds from unspecified asset disposals, according to two market sources who attended the call.
Management added that it has started refinancing talks for an offshore syndicated loan due at some point next year, said the two sources.
Fosun is in the market today offering up-to $300 million capped 3.5-year NC2 Reg S senior unsecured notes to fund a concurrent tender offer for some of the $700 million due 2025s at 99.5, as reported. The initial price guidance for the proposed new notes is 8.875%-area. The maximum acceptance level for the tender is the new issuance amount.
The new offering orderbook has exceeded $300 million as of about 10:30 a.m. this morning, according to a deal update sent from bookrunners seen by Octus.
Investors who participate in the new issuance offering will not be given priority allocation in the concurrent tender, Deutsche Bank, deal manager running the tender offer said on today’s call. If the total tender demand exceeds $300 million, each tendering holder will be treated on a pro-rata basis.
Asset Disposals
On the asset disposal front, Fosun said today that it has CNY 60 billion ($8.3 billion) to CNY 70 billion non-core assets onshore and offshore in the exit pipeline for the next few years and aims to transact when there are favorable pricings, said the sources.
Fosun said the majority of the assets it disposed of in the first half of 2024 are offshore, said management.
In the past three years, the group has disposed of more than CNY 70 billion non-core assets, for which it has received so far more than CNY 60 billion proceeds, with the rest expected by next year, said the sources, citing the call.
Fosun, which has already reduced holdco level debt to around CNY 80 billion from more than CNY 120 billion over the past three years, said it aims further to cut holdco level debt to around CNY 60 billion by 2027. Fosun reported CNY 85.8 billion holdco level debt as of June 30, down from CNY 88.8 billion at end 2023.
Fosun said it does not plan to expand efforts in new investment in the coming years, according to the sources. The size of asset disposals compared with investment currently stands at 8:2, or 9:1, management said, as per the sources.
Refi
Management said on today’s call that it was confident that it would obtain support from bank lenders to complete the refinancing of its due-2025 syndicated loan prior to the maturity.
The due-2025 syndicated loan has a size of around $870 million, according to a third source recently briefed by the company in a one-on-one meeting.
Fosun completed a $888 million three-year syndicated loan in October with 25 participating banks following greenshoe accessions, from the originally $603 million loan first launched in May to refinance an existing three-year senior unsecured offshore syndicated loan.
Management said Bank of China and BNP Paribas each provided $100 million for the new loan and more banks had joined the syndicate.
Management said bank loans and public bonds account for about 70% and 30% of its debt, respectively. The proportion of bank loans had increased from about 50% when its last new issue back in 2021.
The company’s loan-to-value ratio was about 35% to 50% in September and October, said management, adding that stimulus policies rolled out in September have helped the asset valuations some what, as per the sources.
At today’s call, Fosun said it is targeting a benchmark-sized new issue mainly to re-engage the public market after not selling offshore bonds since its last issuance in 2021, as well as to extend its debt maturity profile in order to help improve the company’s credit ratings.
Management would not commit to returning to the offshore market, saying in response to a question only that it would consider further offshore issuance if market conditions were favorable, the sources said.
Fosun said its cash stands at around CNY 10 billion at the holdco level, equivalent to 10% to 15% of its holdco’s total debt, and it plans to maintain its cash around the same level, said the sources.
UPDATE 1: Fosun International Markets Up-to $300M 3.5NC2 SUNs, Concurrent Tender Offer for $700M 5.95% Notes Due 2025 at $995
Mon Nov 11, 2024 09:15 PM ET: Hong Kong-listed conglomerate Fosun International Ltd. is in the market with an up to $300 million capped 3.5-year non-callable two-year issue of Reg S senior unsecured notes, to fund a concurrent tender offer for cash for its $700 million 5.95% notes due October 2025 at a purchase price of $995 per $1,000 principal, according to an announcement to the Singapore Exchange today, Nov. 12.
Initial price guidance for the new notes issue is set in the 8.875% area, and maximum acceptances on the tender are for up to the new issue amount, as reported.
Timing for the new issue is as early as today’s business. The notes are expected to be rated ’BB-’ by S&P, according to the terms. The company will hold a global investor call HERE today, Nov. 12, at 10:30 a.m. Hong Kong time, the terms show.
Joint global coordinators, joint bookrunners and joint lead managers for the new issue are Deutsche Bank, BNP PARIBAS, China CITIC Bank International, Fosun International Securities, HSBC, Natixis, Standard Chartered Bank. Joint bookrunners and joint lead managers are Crédit Agricole CIB, CMB International and ICBC International.
The company intends to finance the tender offer with the proceeds from the concurrent new money issuance and/or its working capital, according to the tender offer announcement.
The tender offer will expire at 4 p.m. London Time on Nov. 19, 2024 and expected settlement date for the offer is on or about Nov. 25, the announcement shows.
Deutsche Bank is acting as the dealer manager and D.F. King is acting as the information and tender agent in relation to the tender offer, the announcement shows.
Original Story 8:25 p.m. UTC on Nov. 11, 2024
BREAKING: Fosun International Markets Up-To $300M 3.5Y NC 2Y SUNs, Concurrent Tender Offer for $700M 5.95% Notes Due 2025
Hong Kong-listed conglomerate Fosun International Ltd. is in the market with an up to $300 million capped 3.5-year non-callable two-year issue of Reg S senior unsecured notes, to fund a concurrent tender offer for its $700 million 5.95% corporate bonds due October 2025, according to terms seen by Octus.
Initial price guidance for the new notes issue is set in the 8.875% area, and maximum acceptances on the tender are for up to the new issue amount.
More follows…