Sidley represented prominent Chinese real estate developer Ganglong China Property Group Limited (“Company”) in connection with its consent solicitation of the US$164.4 million 9.5% senior notes due 2024 to add a redemption option to allow the Company to redeem all of such notes with newly issued notes within a certain grace period. Requisite consents have been received.

After the supplemental indenture to add the redemption option became operative, the Company issued 9.5% senior notes due 2025 in an aggregate principal amount of US$180.5 million, which is equal to (i) US$164.4 million, the aggregate principal amount of the outstanding notes, and (ii) the amount of accrued and unpaid interest to (but excluding) the redemption date, and it accordingly fully redeemed the 9.5% senior notes due 2024 before the expiry of the grace period.

The redemption option is a unique feature, helping the issuer overcome several common deal hurdles. By adding a redemption feature, the consent successfully helped the Company redeem existing notes in whole and pay the redemption price by issuing new notes.

This landmark deal avoided the holdout issue in a typical exchange offer and effectively extended debt maturity without any extension of maturity date of the existing notes, which would not be possible without NDRC quota. We expect that a number of similarly situated companies in the markets may consider following the same approach later on.

Ganglong China Property Group Limited is an established property developer in the Yangtze River Delta Region focusing on the development and sales of properties predominantly for residential use mixed with accompanying ancillary facilities, such as retail units, car parks, and other supplemental areas.

The complex liability management was led by partner Renee Xiong. Other team members included associate Peter Liu and senior legal assistant Kristine Zhang.