Yuzhou Properties : Announcements and Notices - Proposed Issuance of Senior Notes

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 Notes in the United States.

(Incorporated in the Cayman Islands with limited liability)

(Stock Code: 01628)

PROPOSED ISSUANCE OF SENIOR NOTES

The Company proposes to conduct the Proposed Notes Issue. Completion of the Proposed Notes Issue is subject to market conditions and investor interest. Pricing of the Notes, including the aggregate principal amount and the Offer Price and interest rate, will be determined through a book building exercise to be conducted by the joint global coordinators, the joint bookrunners and the joint lead managers. The Notes, if issued, will be repayable at maturity, unless earlier redeemed or repurchased pursuant to their terms. As at the date of this announcement, the amount, terms and conditions of the Proposed Notes Issue have yet to be determined. Upon finalization of the pricing terms of the Notes, the Purchase Agreement will be entered into between the Company and the joint lead managers in relation to the Proposed Notes Issue. The Company intends to use the net proceeds from the Proposed Notes Issue 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 Notes Issue.

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

As no binding agreement in relation to the Proposed Notes Issue has been entered into as at the date of this announcement, the Proposed Notes Issue may or may not materialize.

Investors and shareholders of the Company are urged to exercise caution when dealing in the securities of the Company. A further announcement in respect of the Proposed Notes Issue will be made by the Company should the Purchase Agreement be signed.

THE PROPOSED ISSUE

Introduction

The Company proposes to conduct the Proposed Notes Issue. Completion of the Proposed Notes Issue is subject to market conditions and investor interest. Pricing of the Notes, including the aggregate principal amount and the Offer Price and interest rate, will be determined through a book building exercise to be conducted by the joint global coordinators, the joint bookrunners and the joint lead managers. The Notes, if issued, will be repayable at maturity, unless earlier redeemed or repurchased pursuant to their terms. The Notes are expected to be secured by the shares of certain of the Company's offshore subsidiaries. The shares of such offshore subsidiaries have previously been charged for the benefit of holders of the 2021 Notes, holders of the 2022 Notes, holders of the 2023 Notes, lenders to the 2016 Term Loan Facility and lenders to the 2017 Dual Tranche Term Facility. Holders of the Notes are expected to have the benefit of this collateral and the trustee of the Notes is expected to enter into an accession agreement to the intercreditor agreement concurrently with the issuance of the Notes. As at the date of this announcement, the amount, terms and conditions of the Proposed Notes Issue have yet to be determined. Upon finalization of the pricing terms of the Notes, the Purchase Agreement will be entered into between the Company and the joint lead managers in relation to the Proposed Notes Issue. Further announcements in respect of the Proposed Notes Issue will be made by the Company should the Purchase Agreement be signed.

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

Information about the Group

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 31 December 2017, the Group had 32 projects completed with a total site area of approximately 2,266,302 sq.m. and a total GFA of approximately 6,913,240 sq.m., and 32 projects under development with a total site area of approximately 3,672,537 sq.m. and a total GFA of approximately 8,534,527 sq.m.. As of the same date, the Group had 28 projects held for future development and potential projects with a total site area of approximately 2,543,665 sq.m. and a total GFA of approximately 5,069,938 sq.m. The Group has obtained land use rights certificates for the land for 89 of its projects completed, under development or held for future development. It is in the process of obtaining the land use rights certificates for three of its projects.

Proposed use of proceeds

The Company intends to use the net proceeds from the Proposed Notes Issue 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 Notes Issue.

Listing and rating

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

The Notes have been provisionally rated "BB-" by Fitch Ratings Services and "B+" by S&P Global Ratings. The credit ratings accorded to the Notes are not a recommendation to purchase, hold or sell the Notes in as much as such ratings do not comment as to market price or suitability for a particular investor. There can be no assurance that the ratings will remain in effect for a given period or that the ratings will not be revised by the rating agencies in the future.

As no binding agreement in relation to the Proposed Notes Issue has been entered into as at the date of this announcement, the Proposed Notes Issue may or may not materialize. Investors and shareholders of the Company are urged to exercise caution when dealing in the securities of the Company. A further announcement in respect of the Proposed Notes Issue will be made by the Company should the Purchase Agreement be signed.

DEFINITIONS

In this announcement, the following expressions shall have the following meanings, unless the context otherwise requires:

"2016 Term Loan

Facility"

the term loan facility of up to US$400,000,000 that the Company entered into with Bank of China (Hong Kong) Limited, The Bank of East Asia, Limited, China Construction Bank (Asia) Corporation Limited, Hang Seng Bank Limited, The Hongkong and Shanghai Banking Corporation Limited, Industrial Bank Co., Ltd. Hong Kong Branch, Luso International Banking Limited, Nanyang Commercial Bank Limited and Wing Lung Bank Limited as the arrangers and lenders, and The Hongkong and Shanghai Banking Corporation Limited as agent on 2 September 2016

"2017 Dual Tranche

Term Facility"

the dual tranche term facility of up to US$258,000,000 and HK$334,000,000 that the Company entered into with China Construction Bank (Asia) Corporation Limited, Chiyu Banking Corporation Limited, Fubon Bank (Hong Kong) Limited, Hang Seng Bank Limited, Nanyang Commercial Bank (China) Limited, Shenzhen Branch€یݱਠุვБ€ʕ਷Ϟࠢʮ̡ଉέʱБ, Shanghai Pudong Development Bank Co Ltd, Hong Kong Branch, The Bank of East Asia, Limited€؇ԭვБϞࠢʮ̡and The Hongkong and Shanghai Banking Corporation Limited as the arrangers and lenders, and The Hongkong and Shanghai Banking Corporation Limited as agent on 1 November 2017

"2021 Notes"

the 6.375% senior notes due 2021 in the aggregate principal amount of US$375 million issued by the Company in February 2018

"2022 Notes"

the 6.00% senior notes due 2022 in the aggregate principal amount of US$350 million issued by the Company in January 2017

"2023 Notes"

the 6.00% senior notes due 2023 in the aggregate principal amount of US$250 million issued by the Company in October 2016

"Board"

the board of Directors

"Company"

Yuzhou Properties Company Limited€߃ݲήପٰ΅Ϟࠢʮ̡, a company incorporated under the laws of the Cayman Islands with limited liability and whose shares are listed on the Stock Exchange

Lam Lung On

Chairman

As at the date of this announcement, the executive directors of the Company are Mr. Lam Lung On (Chairman, JP), Ms. Kwok Ying Lan and Mr. Lin Conghui, and independent non-executive directors of the Company are Mr. Lam Kwong Siu, Mr. Wee Henny Soon Chiang and Dr. Zhai Pu.