Results 1 to 20 of 29

Thread: China Starts to Crack?

Threaded View

  1. #1
    GRG55's Avatar
    GRG55 is online now iTulip High Commissioner, Select Premium Member, Canada and Persian Gulf
    Join Date
    May 2007

    Default China Starts to Crack?

    Some will recall my longstanding assertion that one important element of the so-called "Chinese Miracle" was (is?) the longest and greatest misallocation of capital in human history.

    Stein's Law states "If something cannot go on forever, it will stop" (Dr. Herbert Stein, 1976).

    Too early to tell if it has actually stopped (I have my doubts), but perhaps the early signs that it "cannot go on forever". A Chinese State Owned Enterprise (SOE) is giving holders of a series of its US$ denominated offshore bonds fresh haircuts (with Chinese characteristics, LOL?). Discounts to face value of 33% to 64%. OUCH!

    Tewoo bondholders invited to tender at discount or exchange for TSCI bonds

    SINGAPORE, Nov 25 (IFR) - Holders of Tewoo Group's US dollar bonds have been invited to tender them for cash or exchange for new bonds from Tianjin State-owned Capital Investment and Management.

    Commodities trader Tewoo is a wholly owned subsidiary of the Tianjin State-owned Asset Supervision and Administration Commission, but has had difficulties servicing its debt.

    Earlier this month Tewoo appointed Tianjin State-owned Capital Investment and Management (TSCI), a finance arm of Tianjin government founded by Tianjin State-owned Assets Supervision and Administration Commission and Tianjin Bohai State-owned Assets Management, to manage its offshore debts and implement debt management measures.

    Under the proposal, holders of Tewoo's US$1.25bn offshore bonds can choose to tender them for cash at a discount to face value or exchange them at par for new bonds issued by TSCI.

    Holders can tender the US$300m 4.5% bond due on December 16 this year and receive US$667.28 per US$1,000 in principal;
    US572.78 per US$1,000 for the US$300m 4.625% bond due April 6 2020; US$530.89 per US$1,000 for the US$200m 5.5% bond due April 6 2022; and US$360 per US$1,000 for the US$450m 5.8% senior perpetual bond callable in March 2021.

    Alternatively, they can exchange the 2019s for new zero-coupon bonds issued by TSCI and due 2024; the 2020s for 0.15% bonds due 2026; the 2022s for 1.55% bonds due 2029; and the perps for 1.60% bonds due 2039...

    ...Tewoo also has US$500m 3.15% credit-enhanced bonds due on December 1 2020, but these are not included in the offer. The bonds, issued in 2017 through Tewoo Group No 4, came with a standby letter of credit from ICBC's Tianjin branch, and the company said ICBC would pay the next coupon on December 1.

    Last edited by GRG55; 11-30-19 at 03:57 PM.

Similar Threads

  1. Crack up boom in the $?
    By Mega in forum News
    Replies: 0
    Last Post: 01-12-16, 12:50 PM
  2. Crack up boom for the $....?
    By Mega in forum News
    Replies: 5
    Last Post: 05-14-12, 11:41 PM
  3. BOE & Crack Whores
    By Mega in forum News
    Replies: 0
    Last Post: 10-08-09, 07:40 PM



Posting Permissions

  • You may not post new threads
  • You may not post replies
  • You may not post attachments
  • You may not edit your posts
Opinions expressed herein are those of the posters, not those of iTulip, Inc., its owners, or management. All material posted on this board becomes the intellectual property of the poster and iTulip, Inc., and may not be reposted in full on another website without the express written permission of iTulip, Inc. By exception, the original registered iTulip member who authored a post may repost his or her own material on other sites. Permission is hereby granted to repost brief excerpts of material from this forum on other websites provided that attribution and a link to the source is included with the reposted material.

Nothing on this website is intended or should be construed as investment advice. It is intended to be used for informational and entertainment purposes only. We reserve the right to make changes, including change in price, content, description, terms, etc. at any time without notice. By using this board you agree that you understand the risks of trading, and are solely responsible for your own investment and trading decisions. Read full legal disclaimer.

Journalists are not permitted to contact iTulip members through this forum's email and personal messaging services without written permission from iTulip, Inc. Requests for permission may be made via Contact Us.

Objectionable posts may be reported to the board administrators via Contact Us.