Fosun Tourism Group to issue 7b yuan in CMBS to accelerate development

Fosun Tourism Group, the travel business under the Shanghai-based conglomerate Fosun International, announced on Sunday it will issue 7 billion yuan ($986.9 million) in commercial mortgage backed securities to provide sufficient cash reserves and accelerate the Group's development.

The Hong Kong-listed tourism group, which is better known as Foliday, said in the announcement that the Sanya Atlantis hotel and its water park will be the collateral of the CMBS. The pledge of the CMBS consists of 100 percent equity interest in Hainan Atlantis Business and Tourism Development Co Ltd, the parent company of Sanya Atlantis, as well as operating revenue and accounts receivable of Sanya Atlantis.

As Foliday's first tourism destination project, Atlantis Sanya was officially opened in April 2018. According to Foliday's 2019 fiscal results released on March 17, sales revenue of Sanya Atlantis went up 74.2 percent year-on-year to reach 1.31 billion yuan last year.

The term of the CMBS is 24 years. The prioritized CMBS is valued at 6.8 billion yuan, with a coupon rate of 5 percent and 48 installments. The first repayment date is July 28, 2020, and each six months there from as remaining repayment periods. The size of the subordinated CMBS is 201 million yuan.

Approximately 2.9 billion yuan of the proceeds is proposed to repay the outstanding bank loans of Sanya Atlantis, and the remaining proceeds are for the Group's business development. The Foliday board thinks revitalizing existing assets by issuing the CMBS will help improve the financing structure of the company, effectively expand financing channels, reduce financing costs, enhance financing efficiency, help provide sufficient cash reserves and accelerate the development of the Group, according to the announcement.

As of March 20, the fundraising of 7 billion yuan was completed. The listing and trading of the CMBS will be completed in accordance with relevant regulations of the Shanghai Stock Exchange, Foliday said in the announcement.