LONDON - DCM US Multi-Family Homes Plc, an issuer of secured medium-term notes, has announced the delisting of its bonds from the Global Exchange Market (GEM) and the Cayman Island Stock Exchange due to ongoing financial difficulties. The company has been unable to remedy a series of continuing Events of Default for each series of its notes. These defaults date back to October 2023 for various series of notes, with the most recent being on November 21, 2024.
The issuer has been in a state of financial distress, as indicated by its inability to pay auditors' fees required for the completion of its audited financial statements for the financial year ending April 29, 2024. The Administration Agent has also reported that the issuer's accounts hold minimal funds, rendering the company insolvent on a cash flow basis.
The delisting process affects US$100 million Series 2020-DCM1 9.25% fixed rate notes due 2025, US$118 million Series 2020-DCM2 8.4% fixed rate notes due 2025, US$100 million Series 2022-DCM3 8.75% fixed rate notes due 2025, and US$100 million Series 2022-DCM4 9.5% fixed rate notes due 2025.
The issuer has communicated to note holders that the failure to pay listing fees may have tax implications for future coupon payments, potentially obliging the issuer to pay net of any applicable withholding tax. Additionally, the sale of properties securing the notes has been challenged by market conditions in the United States, with high interest rates causing potential acquisitions to fall through and asset values to decline.
Noteholders have been reminded that if they wish to instruct the Note Trustee or the Security Trustee to act, they must contact the Note Trustee and be prepared to provide instructions and agree to indemnification terms. However, the Note Trustee has expressed that it does not intend to take further action without the direction and indemnification of the note holders.
The press release statement, which serves as the source of this information, concludes by advising note holders to seek independent legal and financial advice and not to rely on any advice or information provided to the Note Trustee or statements regarding the legal position included in notices relating to the notes. The Note Trustee reserves the right to take remedial actions during an Event of Default or any other breach.
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