Macrotech and Lodha Developers UK, the
holding company for the group’s London
assets, will guarantee the bonds, which are
EXPECTEDûTOûBEûRATEDû#AAûBYû-OODYS
The ratings agency downgraded
Macrotech in November from B3, citing
RElNANCINGûRISKS
In November, Fitch cut Macrotech to CCC
from B–, warning that it had only raised
around US$155m at that time towards
repaying the maturing dollar bond. The
company has been selling assets in India and
SECURINGûlNANCINGûAGAINSTûITSûINVENTORYûINû
the UK.
The company needs to put US$118m in an
escrow account before issuing the bond, and
plans to raise that from an inventory facility,
secured against unsold apartments at
Lincoln Square, one of Macrotech’s London
projects; the transfer of funds from its
Indian operation; and collections from sales.
Only two Triple C rated US dollar deals
from Asia came to market last year, both
from Chinese issuers. Zhongrui Industrial
Group sold a US$70m two-year, rated Caa1
-OODYS ûATûûINû$ECEMBER ûANDûlVEûmonths before that Tahoe Group sold a
US$400m three-year bond, rated Caa1/CCC+
(Moody’s/Fitch), at an eye-watering 16%
yield.
The last Triple C deals from outside China
were from Indonesia’s MNC Investama and
Gajah Tunggal. Both bonds were rated
Caa1/B– (Moody’s/S&P) at the time of issue,
but in both cases Moody’s said it might
upgrade the bonds if the companies
completed their issues to reduce their
RElNANCINGûRISKS
There was no such reassurance for
investors in Macrotech’s issue. Moody’s
warned that even if the issue was completed
THEûDEVELOPERûWILLûSTILLûFACEûHIGHûRElNANCINGû
risk, with US$1bn of debt due in March- It has a negative outlook on the rating.
JAIN IRRIGATION DOWNGRADED
TO DEFAULTS&P has downgraded JAIN IRRIGATION SYSTEMS
to default after it missed an interest
payment on US$200m of 7.125% senior
notes due 2022 past a 30-day grace period.The rating cut to D applies to both the
issuer and the notes.
Wholly owned subsidiary Jain
International Trading BV issued the bonds
and Jain Irrigation is the parent guarantor.
The interest payment was due on
February 1 and the grace period ended on
March 3.
After missing the initial deadline the
Indian irrigation systems manufacturer said
ITûSTILLûHADûSUFlCIENTûCASHûONûHANDûTOûPAYûTHEû
coupon and that it intended to make the
payment within the grace period, citing
“temporary liquidity issues”.
The bonds were bid at a cash price of 32 on
March 4 when the rating agency announced
THEûDOWNGRADE ûACCORDINGûTOû2ElNITIVûDATA
The bond price dropped over 20 points in
October after Jain Irrigation missed
principal payments on Rs3.75bn (US$51m)
of working capital loans.
S&P then downgraded Jain Irrigation to
selective default, from CCC, while the rating
for the bonds was cut to CC from CCC.
The notes were rated B+/B+ (S&P/Fitch)
when they were sold in January 2017.58 International Financing Review March 7 2020ASIA
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Pricing date Issuer Amount Maturity Coupon (%) Reoffer Spread (bp) Yield (%)8 IFR Emerging 2323 p 55 - 62 .indd 58 06 / 03 / 2020 19 : 04 : 33