Shimao Group Holdings Limited

Event Publicly Available Information:

Has a Failure to Pay Credit Event occurred with respect to Shimao Group Holdings Limited?

The Eligible Market Participant who submitted the question provided the following information. Note that the below does not represent the views of the AEJ Determinations Committee.

Reference is made to the USD$400,000,000 Zero Coupon Senior Notes with ISIN: XS2355408514 and Common Code 235540851 (the "Notes") due on 14 June 2022 (the "Notes Maturity Date") issued by Shimao Group Holdings Limited (the "Reference Entity") under the terms and conditions specified in an indenture, dated as of 16 June 2021 (the "Indenture") with an aggregate principal amount outstanding of USD$ 373,945,000 (the "Notes Principal Amount"). The Notes Principal Amount was repayable in full by the Reference Entity on the Notes Maturity Date, but the Reference Entity failed to pay such Notes Principal Amount on the Notes Maturity Date.

Under the terms and conditions of the Notes specified in the Indenture, no grace period applies with respect to the payment of the Notes Principal Amount due on the Notes Maturity Date. As of 21 June 2022, the Notes Principal Amount remained unpaid, as confirmed in a notice (the “Trustee Notice”) from the trustee in respect of the Notes. Pursuant to Section 1.35(a)(ii)(B) of the 2014 Credit Derivatives Definitions, information received from the trustee for the Notes is Publicly Available Information. The Indenture and the Trustee Notice are available on Bloomberg.

The failure to pay such Notes Principal Amount resulted from a deterioration of the creditworthiness and the financial condition of the Reference Entity as evidenced by public news articles, including from Reorg and Debtwire (paywalled) which can be found on the following websites:

1. https://app.reorg.com/v3#/items/intel/8160?item_id=181642

2. https://www.debtwire.com/intelligence/view/intelcms-b36m73?searchTerm=shimao

3. https://www.debtwire.com/intelligence/view/intelcms-mdwhst

We further request that the Determinations Committee make clear that the Credit Event Resolution Request Date occurred during the Notice Delivery Period for transactions with a Scheduled Termination Date from and including 20 June 2022. Terms used but not defined in this paragraph have the meaning given in the 2014 Credit Derivatives Definitions.

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Additional Information

Issue Number:

2022062201

Submitted by:

JPMorgan

Category:

Credit Event

Coverage Election:

2014 Definitions

Status:

Closed

Outcome:

Question Decided
Procedural History
- Closed
  
  7/21/2022 01:55pm EDT
- Ongoing
  
  DC Decision
  Asia Ex-Japan DC Meeting Statement - 1 July 2022
  As the Relevant Transaction 300/5 Criteria were not satisfied in respect of 2014 Transactions in respect of Shimao Group Holdings Limited (the Reference Entity), the Asia Ex-Japan DC met on Thursday 30 June 2022 to discuss whether or not an Auction should be held to settle 2014 Transactions in respect of the Reference Entity.
  The Asia Ex-Japan DC determined that no Auction will be held to settle 2014 Transactions relating to the Reference Entity and accordingly no Transaction Auction Settlement Terms will be published. 1 July 2022 (being the date the decision was announced by the DC Secretary) is the “No Auction Announcement Date” for the purposes of Section 6.11 of the 2014 Definitions.
  In relation to Physical Settlement for Standard Asia Corporate Transactions in respect of the Reference Entity, the NOPS Cut-off Date can be calculated in accordance with Section 8.10(b)(i) and Section 1.53 of the 2014 Definitions. Since the NOPS Cut-off Date would fall on 31 July 2022 pursuant to Section 8.10(b)(i), the date will be adjusted pursuant to Section 1.53 for Standard Asia Corporate Transactions using the Following Business Day Convention such that the NOPS Cut-off Date falls on 1 August 2022.
  7/01/2022 03:00pm EDT
- Ongoing
  
  DC Decision
  Asia Ex-Japan DC Meeting Statement – 28 June 2022
  The Asia Ex-Japan DC met on Monday 27 June 2022 to discuss whether a Failure to Pay Credit Event had occurred with respect to Shimao Group Holdings Limited (the Reference Entity) due to the non-payment of the Reference Entity’s obligations in respect of zero coupon senior notes (the Notes) pursuant to an indenture dated 16 June 2021. The Asia Ex-Japan DC noted that the indenture provided for the issue of USD 400,000,000 of Notes and the report published by Reorg submitted as part of the question also referred to the amount of such Notes being USD400,000,000.
  The Asia Ex-Japan DC considered the Publicly Available Information submitted by the Eligible Market Participant that raised the DC Question. According to a notice to noteholders from the Trustee dated 21 June 2022, payment under the Notes was due on 14 June 2022 and the [Reference Entity] “has not made payment of principal”.
  The Asia Ex-Japan DC determined that the Notes constituted an Obligation of the Reference Entity and that the Reference Entity had failed to make payments in respect of such Obligation in accordance with its obligations under the Notes in excess of the Payment Requirement. The Asia Ex-Japan DC also considered the 2019 Narrowly Tailored Credit Event Supplement to the 2014 Credit Derivatives Definitions and concluded that there was sufficient Eligible Information to determine that the Credit Deterioration Requirement was satisfied.
  The Asia Ex-Japan DC noted that a Failure to Pay Credit Event for the purposes of the 2014 Definitions can only occur following the expiry of the relevant grace period. The Asia Ex-Japan DC noted that the terms of the Notes do not apply a grace period for failure to pay principal under the Notes, and therefore the deemed Grace Period under Section 1.46(c) of the 2014 Definitions applied.
  Following the non-payment by the Reference Entity as of 14 June 2022, in respect of standard CDS with a standard Scheduled Termination Date on or after 17 June 2022, the Grace Period therefore expired immediately prior to midnight on 17 June 2022.
  Accordingly, the Asia Ex-Japan DC concluded that a Failure to Pay Credit Event had occurred with respect to the Reference Entity and the date of the Failure to Pay Credit Event was 17 June 2022.
  The Asia Ex-Japan DC will meet again in due course to discuss settlement of Credit Derivative Transactions referencing the Reference Entity.
  6/28/2022 05:25am EDT
- Request Accepted by DC
  
  6/22/2022 12:20pm EDT