The agreement also makes Sunac the first defaulted mainland Chinese developer to reduce its onshore debt.
In a filing with Hong Kong’s stock exchange on Tuesday, the Tianjin-based developer said repayment of the principal and interest on the 10 bonds “will be adjusted” and “restructuring plan options including bond repurchases”, cash tender offers, payment via equity and debt settlement with assets would be considered.
The company said it would make arrangements for the bondholders to select their own repayment options.
Sunac’s deal bodes well for China’s property sector, participants in the market said.
“Onshore creditors are not normally willing to compromise,” said Raymond Cheng, a managing director at CGS International Securities in Hong Kong. “If restructuring … can also be applied to developers’ onshore debts, it will further help reduce developers’ liquidity pressure.”
The deal could “provide a viable reference model for other embattled Chinese property developers”, said Kenny Ng, a strategist at Everbright Securities International.