Yuzhou Properties : Announcements and Notices - Issuance of US$300 Million Senior Perpetual Securities

Hong Kong Exchanges and Clearing Limited and The Stock Exchange of Hong Kong Limited take no responsibility for the contents of this announcement, make no representation as to its accuracy or completeness and expressly disclaim any liability whatsoever for any loss howsoever arising from or in reliance upon the whole or any part of the contents of this announcement.

This announcement is for information purposes only and does not constitute an invitation or a solicitation of an offer to acquire, purchase or subscribe for securities or an invitation to enter into an agreement to do any such things, nor is it calculated to invite any offer to acquire, purchase or subscribe for any securities.

This announcement is not an offer of securities for sale or the solicitation of an offer to buy securities in the United States or in any country or jurisdiction in which any such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of such country or jurisdiction. Securities may not be offered or sold in the United States absent registration or an exemption from registration. Any public offering of securities to be made in the United States will be made by means of a prospectus that may be obtained from the Company and will contain detailed information about the Company and management, as well as financial statements. The Company has not registered and does not intend to register any of the Securities in the United States.

(Incorporated in the Cayman Islands with limited liability)

Reference is made to the announcement of the Company dated 25 September 2017 in respect of the Proposed Issue. The Board is pleased to announce that on 25 September 2017, the Company entered into the Purchase Agreement with BOC International, Citi, Credit Suisse, HSBC, Huatai, Industrial Bank, Haitong International and Yuzhou Financial in connection with the issue of the Securities in the aggregate principal amount of US$300 million.

The estimated net proceeds from the Proposed Issue, after deduction of underwriting commissions and other estimated expenses, will amount to approximately US$295,960,000. The Company intends to use the net proceeds primarily for refinancing its existing indebtedness and, to a lesser extent, for general working capital purposes. The Company may adjust the foregoing plans in response to changing market conditions and, thus, reallocate the use of the proceeds from the Proposed Issue.

The Company will seek a listing of the Securities on the Stock Exchange. A confirmation of the eligibility for the listing of the Securities has been received from the Stock Exchange. Listing of the Securities to the Stock Exchange is not to be taken as an indication of the merits of the Company or the Securities.

Reference is made to the announcement of the Company dated 25 September 2017 in respect of the Proposed Issue. The Board is pleased to announce that on 25 September 2017, the Company entered into the Purchase Agreement with BOC International, Citi, Credit Suisse, HSBC, Huatai, Industrial Bank, Haitong International and Yuzhou Financial in connection with the issue of the Securities in the aggregate principal amount of US$300 million.

25 September 2017

1. the Company as the issuer; and

2. BOC International, Citi, Credit Suisse, HSBC, Huatai, Industrial Bank and Haitong International as the initial purchasers and Yuzhou Financial.

BOC International, Citi, Credit Suisse, HSBC, Huatai, Industrial Bank, Haitong International and Yuzhou Financial are the joint global coordinators, joint bookrunners and joint lead managers in respect of the offer and sale of the Securities. To the best of the Directors' knowledge, information and belief having made all reasonable enquiries, each of BOC International, Citi, Credit Suisse, HSBC, Huatai, Industrial Bank and Haitong International as an initial purchaser, is an independent third party and not a connected person of the Company.

The Securities will only be offered outside the United States in compliance with Regulation S under the Securities Act. None of the Securities will be offered to the public in Hong Kong and none of the Securities will be placed to any connected persons of the Company.

Subject to certain conditions to completion, the Company will issue the Securities in the aggregate principal amount of US$300 million.

The offer price of the Securities will be 100% of the principal amount of the Securities.

Subject to the occurrence of an optional deferral event and in accordance with the terms of the indenture governing the Securities, the Securities will confer a right to receive distribution (each, a "Distribution") from, and including, the Issue Date or from and including the most recent Distribution payment date to which Distribution has been paid or duly provided for, at the distribution rate (the "Distribution Rate") as described below, payable semi-annually in arrear on 29 March and 29 September of each year (each, a "Distribution Payment Date"), commencing on 29 March 2018.

The Distribution Rate applicable to the Securities shall be:

1. in respect of the period from, and including, the Issue Date to, but excluding, the First Call Date, 5.375% (the "Initial Distribution Rate"); and

2. in respect of the period (A) from, and including the First Call Date, to, but excluding, the Reset Date falling immediately after the First Call Date, and (B) from, and including, each Reset Date falling after the First Call Date to, but excluding, the immediately following Reset Date, the relevant Reset Distribution Rate.

Upon occurrence of a change of control triggering event or a relevant indebtedness default event, unless an irrevocable notice of redemption has given by the Company or evidence is received by the trustee that the relevant event no longer exists by the 30th day following the occurrence of such event, the then-prevailing Distribution Rate and subsequent Distribution Rate will increase by 5% per annum with effect from (and including) the 30th day after the occurrence of the relevant event, until the cure or remedy of such event.

The Company may, at its sole discretion, elect to defer (in whole or in part) any Distribution which is otherwise scheduled to be paid on a Distribution Payment Date to the next Distribution Payment Date.

The Securities are (i) direct, unconditional, unsecured and unsubordinated obligations of the Company; (ii) senior in right of payment to any existing and future obligations of the Company expressly subordinated in right of payment to the Securities; (iii) at least pari passu in right of payment with all unsecured, unsubordinated indebtedness of the Company (subject to any priority rights of such unsecured, unsubordinated indebtedness pursuant to applicable law); (iv) effectively subordinated to all existing and future secured obligations of the Company, to the extent of the collateral serving as security therefor; and (v) effectively subordinated to all existing and future obligations of the subsidiaries of the Company.

The Group is one of the leading national property developers with its headquarters in Shanghai. The Group's primary focus is developing high quality residential properties. In order to diversify its portfolio, the Group also develops retail and commercial properties, including office buildings, shopping malls and hotels, and retains some of them as long-term investments. In addition, the Group engages in property-related businesses such as residential and commercial property management.

As of 30 June 2017, the Group had 29 projects completed with a total site area of approximately 1,980,733 sq.m. and a total GFA of approximately 6,094,146 sq.m., and 33 projects under development with a total site area of approximately 3,859,104 sq.m. and a total GFA of approximately 9,107,869 sq.m. As of the same date, the Group had 17 projects held for future development and potential projects with a total site area of approximately 1,108,262 sq.m. and a total GFA of approximately 2,465,788 sq.m. The Group has obtained land use rights certificates for the land for 68 of its projects completed, under development or held for future development. It is in the process of obtaining the land use rights certificates for 11 of its projects.

The estimated net proceeds from the Proposed Issue, after deduction of underwriting commissions and other estimated expenses, will amount to approximately US$295,960,000. The Company intends to use the net proceeds primarily for refinancing its existing indebtedness and, to a lesser extent, for general working capital purposes.