UPDATE 1: 7:41 a.m. ET 7/18/2023: Dalian Wanda Commercial Management Group Co.’s $400 million 6.875% due July 23 offshore notes regained some ground and gained as much as 11 points late this afternoon to indications of around 69.5/ 72.5, from 58/ 61 earlier today, said three buyside sources. The 7.25% due 2024 notes were up half a point to 42.5/ 45.5 from 42/45, the sources said.
As reported, the company is negotiating with an onshore commercial bank to release a pledge on its offshore funds, and the two parties are still in talks to resolve pre-conditions which should be met ahead of releasing the pledge.
Original Story 3:36 a.m. UTC on July 18, 2023
Dalian Wanda Negotiating With Onshore Commercial Bank to Release Pledge on Offshore Funds; Co. Receives CNY 1B From Film Unit Stake Sale, Proceeds Partly Used to Release Offshore Pledge
Dalian Wanda Commercial Management Group Co. is negotiating with an onshore commercial bank to release a pledge on its offshore funds, said two sources familiar with the matter. The two parties are still in talks to resolve pre-conditions which should be met ahead of releasing the pledge, resulting in a delay, the sources said.
The company previously used its offshore funding to conduct onshore financing under the program known as “onshore financing with offshore guarantee” while it plans to pay back onshore loans to release offshore funds,
as reported.
Dalian Wanda Commercial told investors yesterday that it has $100 million free cash on its books, and another $100 million which would become available through the release of the pledge, which is already in progress, said two separate sources familiar. It would still therefore need $200 million free cash to redeem its $400 million notes due July 23, the same sources said.
In relation to the
sale of an 8.3% stake in Wanda Film Holding Co. to Lu Lili for CNY 2.173 billion ($303 million) , the company has told investors that it has already received CNY 1 billion as a first installment payment, and has used part of the proceeds towards the release of the pledge over its offshore funds, said one of the first four sources and a fifth source familiar with the matter.
On the separate sale of an
8.1% stake in Wanda Film Holding Co. to Shenxian Rongzhi Xingye Management Consulting Center (LP) - an entity 73.9% owned by Wanda chairman Wang Jianlin - for CNY 2.336 billion, Dalian Wanda Commercial told investors the use of proceeds is aimed at onshore bond repayment, the first two sources familiar noted.
Due to concerns about whether the July 23 repayment requirement can be met, Dalian Wanda Commercial’s onshore and offshore notes have continued to drop across the curve today, July 18, with its CNY 3.8 billion bond putable Sept. 9 “20 Wanda 01” down 19.6 points to 64.
The company’s offshore notes dropped three to 15 points today, with its $400 million due July notes down 15 points to 58/61, and its due 2024 notes down 7 points to 42/45, according to buysiders.
S&P Global downgraded Dalian Wanda Commercial’s long-term issuer credit rating to ‘B+’ from ‘BB’ on July 17, citing a weakened liquidity buffer after the company repaid maturities with internal resources.
A company spokesperson said the company is still raising funding for the due July 23 USD notes and the CNY 3.8 billion bond putable Sept. 9. “20 Wanda 01”.