Panda Green settles $350m notes with hours to spare

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The holders of US$242 million worth of 8.25% senior notes issued by Chinese solar developer Panda Green who refused to accept a refinancing offer have received a Chinese new year gift from the company.

The heavily-indebted developer confirmed this afternoon it had settled the notes, which were due to mature tomorrow, after Chinese state-owned major shareholder China Merchants Group Ltd signed up to US$260 million of hastily-issued 8% senior notes theoretically due to mature in 2020.

The subsidiary of the main shareholder acting as placing agent in that deal will bank a US$2.6 million fee for organizing the loan to the Hong Kong-listed developer and China Merchants will get its money back long before the two years is out thanks to a caveat inserted into the bond.

State bail-out

The clause in question stipulates Panda Green must settle the bond by July 23 whether the developer benefits from a planned HK$1.79 billion (US$230 million) bail-out by another state-owned entity – Beijing Energy Holdings Co Ltd – or not.

Beijing Energy recently pushed back the completion date of its proposed takeover to February 18, apparently because of the doubt over settlement of the total US$350 million worth of senior notes that were due to mature tomorrow.

Should that financial lifeline fail to materialize by the July deadline, however, Panda Green will be liable to return China Merchants’ US$260 million – plus accrued interest – by some other means.