China South City : Issuance of US$225,000,000 10.875% Senior Notes Due 2022

Hong Kong Exchanges and Clearing Limited and The Stock Exchange of Hong Kong Limited take no responsibility for the contents of this announcement, make no representation as to its accuracy or completeness and expressly disclaim any liability whatsoever for any loss howsoever arising from or in reliance upon the whole or any part of the contents of this announcement.

This announcement is for information purposes only and does not constitute an invitation or solicitation of an offer to acquire, purchase or subscribe for securities or an invitation to enter into an agreement to do any such things, nor is it calculated to invite any offer to acquire, purchase or subscribe for any securities.

This announcement is not for distribution, directly or indirectly, in or into the United States. This announcement and the information contained herein does not constitute or form part of an offer to sell securities in the United States. Securities may not be offered or sold in the United States unless registered pursuant to the U.S. Securities Act of 1933, as amended (the "Securities Act"), or pursuant to an applicable exemption from such registration requirement. Any public offering of securities to be made in the United States will be made by means of a prospectus that will contain detailed information about our company and management, as well as financial statements. The securities referred to herein have not been and will not be registered under the Securities Act and no public offering of securities will be made in the United States. No money, securities or other consideration is being solicited by this announcement or the information contained herein and, if sent in response to this announcement or the information contained herein, will not be accepted.

(incorporated in Hong Kong with limited liability)

(Stock code: 1668)

Issuance of US$225,000,000 10.875% Senior Notes Due 2022

The Board hereby announces that on 19 February 2020, the Company and the Subsidiary Guarantors entered into the Purchase Agreement with UBS, Barclays, Credit Suisse, Guotai Junan International, Haitong International, BOC International, CCB International, China Everbright Bank Hong Kong Branch, CMB International, HeungKong Financial, Kaisa Financial Group and Orient Securities (Hong Kong) in connection with the Notes Issue.

The estimated net proceeds of the Notes Issue, after deducting the underwriting discount and other estimated expenses payable in connection with the Notes Issue, will be approximately US$216.42 million. The net proceeds of the Notes Issue will be used by the Company primarily to refinance existing indebtedness and for general corporate purposes. The Company may adjust the foregoing plans in response to changing market conditions, change in government policies or other factors and thus, the Company may reallocate the use of the proceeds for different uses.

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Application will be made for the listing of the Notes on the SGX-ST. Admission of the Notes to the SGX-ST is not to be taken as an indication of the merits of the Company or the Notes. No listing of the Notes has been or will be sought in Hong Kong.

Reference is made to the Announcement. Unless the context requires otherwise, capitalized terms used in this announcement shall have the same meaning as those defined in the Announcement.

The Board hereby announces that on 19 February 2020, the Company and the Subsidiary Guarantors entered into the Purchase Agreement with UBS, Barclays, Credit Suisse, Guotai Junan International, Haitong International, BOC International, CCB International, China Everbright Bank Hong Kong Branch, CMB International, HeungKong Financial, Kaisa Financial Group and Orient Securities (Hong Kong) in connection with the issuance of US$225,000,000 10.875% senior notes due 2022 by the Company.

THE PURCHASE AGREEMENT

Date:

19 February 2020

Parties:

1. the Company as the issuer;
2. the Subsidiary Guarantors;
3. UBS;
4. Barclays;
5. Credit Suisse;
6. Guotai Junan International;
7. Haitong International;
8. BOC International;
9. CCB International;
10. China Everbright Bank Hong Kong Branch;
11. CMB International;
12. HeungKong Financial;
13. Kaisa Financial Group; and
14. Orient Securities (Hong Kong).

(c) to (n), each as an "Initial Purchaser".

UBS, Barclays, Credit Suisse, Guotai Junan International and Haitong International are the joint global coordinators, the joint bookrunners and the joint lead managers, and BOC International, CCB International, China Everbright Bank Hong Kong Branch, CMB International, HeungKong Financial, Kaisa Financial Group and Orient Securities (Hong Kong) are the joint bookrunners and the joint lead managers. To the best of the Directors' knowledge, information and belief, none of the Initial Purchasers is a connected person of the Company.

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The obligations of the Initial Purchasers to purchase the Notes are subject to certain conditions in the Purchase Agreement. If any of the conditions under the Purchase Agreement shall not have been fulfilled when and as provided in the Purchase Agreement, the Purchase Agreement and all obligations of the Initial Purchasers thereunder may be cancelled at, or at any time prior to, the Closing Date by the Initial Purchasers.

The Notes Issue has not been and will not be registered under the Securities Act or any state securities law of the U.S. and may not be offered or sold within the United States unless so registered or pursuant to an applicable exemption from registration and may only be offered and sold outside the United States in reliance on Regulation S under the Securities Act. None of the Notes will be offered to the public in Hong Kong.

Principal terms of the Notes

Notes offered

Subject to certain conditions to completion, the Company will issue the Notes in the aggregate principal amount of US$225,000,000 which will mature on 26 June 2022, unless redeemed earlier pursuant to the terms thereof.

Offering Price

The offering price of the Notes will be 97.073% of the principal amount of the Notes.

Interest

The Notes will bear interest from and including 26 February 2020 at the rate of 10.875% per annum, payable semi-annually in arrear, except that the first payment of interest, to be made on 26 June 2020, will be in respect of the period from and including 26 February 2020 to but excluding 26 June 2020. Interest will be paid on 26 June and 26 December of each year, commencing from 26 June 2020.

Ranking of the Notes

The Notes:

1. are general obligations of the Company;
2. are senior in right of payment to any existing and future obligations of the Company expressly subordinated in right of payment to the Notes;
3. rank at least pari passu in right of payment with the 2016 Notes, the 2017 March Notes, the 2017 November Notes, the 2018 January Notes, the 2018 May Notes, the 2019 March Notes, the 2019 December Notes and with all other unsubordinated indebtedness of the Company (subject to any priority rights pursuant to applicable law);
4. are guaranteed by the Subsidiary Guarantors and the JV Subsidiary Guarantors (if any) on a senior basis, subject to certain limitations;

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1. are effectively subordinated to the secured obligations of the Company, the Subsidiary Guarantors and the JV Subsidiary Guarantors (if any), including the 2016 Notes, the 2017 March Notes, the 2017 November Notes, the 2018 January Notes and the 2018 May Notes, to the extent of the value of the assets serving as security therefor; and
2. are effectively subordinated to all existing and future obligations of the Non-Guarantor Subsidiaries and Unrestricted Subsidiaries.

Events of default

The events of default (the "Events of Default") under the Notes include, among others,

1. default in the payment of principal of (or premium, if any, on) the Notes when the same becomes due and payable at maturity, upon acceleration, redemption or otherwise;
2. default in the payment of interest on any Note when the same becomes due and payable, and such default continues for a period of 30 consecutive days;
3. default in the performance or breach of the provisions of the covenants described under the Indenture;
4. the Company or any Restricted Subsidiary defaults in the performance of or breaches any other covenant or agreement in the Indenture or under the Notes (other than a default specified in clause (1), (2) or (3) above) and such default or breach continues for a period of 30 consecutive days after written notice by the Trustee or the Holders of 25% or more in aggregate principal amount of the Notes then outstanding;
5. there occurs with respect to any indebtedness of the Company or any Restricted Subsidiary having an outstanding principal amount of US$20 million (or the Dollar Equivalent thereof) or more in the aggregate for all such indebtedness of all such persons, whether such indebtedness now exists or shall hereafter be created, (a) an event of default that has caused the holder thereof to declare such indebtedness to be due and payable prior to its stated maturity and/or (b) the failure to make a principal payment when due;
6. one or more final judgments or orders for the payment of money are rendered against the Company or any of its Restricted Subsidiaries and are not paid or discharged, and there is a period of 60 consecutive days following entry of the final judgment or order that causes the aggregate amount for all such final judgments or orders outstanding and not paid or discharged against all such persons to exceed US$20 million (or the Dollar Equivalent thereof) during which a stay of enforcement, by reason of a pending appeal or otherwise, is not in effect;

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1. an involuntary case or other proceeding is commenced against the Company or any Significant Restricted Subsidiary with respect to it or its debts under any applicable bankruptcy, insolvency or other similar law now or hereafter in effect seeking the appointment of a receiver, liquidator, assignee, custodian, trustee, sequestrator or similar official of the Company or any Significant Restricted Subsidiary or for any substantial part of the property and assets of the Company or any Significant Restricted Subsidiary and such involuntary case or other proceeding remains undismissed and unstayed for a period of 60 consecutive days; or an order for relief is entered against the Company or any Significant Restricted Subsidiary under any applicable bankruptcy, insolvency or other similar law as now or hereafter in effect;
2. the Company or any Significant Restricted Subsidiary (a) commences a voluntary case under any applicable bankruptcy, insolvency or other similar law now or hereafter in effect, or consents to the entry of an order for relief in an involuntary case under any such law, (b) consents to the appointment of or taking possession by a receiver, liquidator, assignee, custodian, trustee, sequestrator or similar official of the Company or any Significant Restricted Subsidiary or for all or substantially all of the property and assets of the Company or any Significant Restricted Subsidiary or (c) effects any general assignment for the benefit of creditors; or
3. any Subsidiary Guarantor or JV Subsidiary Guarantor denies or disaffirms its obligations under its Subsidiary Guarantee or JV Subsidiary Guarantee or, except as permitted by the Indenture, any Subsidiary Guarantee or JV Subsidiary Guarantee is determined to be unenforceable or invalid or shall for any reason cease to be in full force and effect.

If an Event of Default (other than an Event of Default specified in clause (7) or (8) above) occurs and is continuing under the Indenture, the Trustee or the Holders of at least 25% in aggregate principal amount of the Notes then outstanding, by written notice to the Company (and to the Trustee if such notice is given by the Holders), may, and the Trustee at the request of such Holders shall (subject to the Trustee first being indemnified, secured and/or prefunded to its satisfaction), declare the principal of, premium, if any, and accrued and unpaid interest on the Notes to be immediately due and payable. Upon a declaration of acceleration, such principal of, premium, if any, and accrued and unpaid interest shall be immediately due and payable. If an Event of Default specified in clause (7) or (8) above occurs with respect to the Company or any Restricted Subsidiary, the principal of, premium, if any, and accrued and unpaid interest on the Notes then outstanding shall automatically become and be immediately due and payable without any declaration or other act on the part of the Trustee or any Holder.

Covenants

The Notes and the Indenture governing the Notes will limit the Company's ability and the ability of the Restricted Subsidiaries to, among other things:

1. incur or guarantee additional indebtedness or issue disqualified or preferred stock;
2. declare dividends on its capital stock or purchase or redeem capital stock;
3. make investments or other specified restricted payments;

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1. issue or sell capital stock of Restricted Subsidiaries;
2. guarantee indebtedness of Restricted Subsidiaries;
3. sell assets;
4. create liens;
5. enter into sale and leaseback transactions;
6. enter into agreements that restrict the Restricted Subsidiaries' ability to pay dividends, transfer assets or make intercompany loans;
7. enter into transactions with shareholders or affiliates; and
8. effect a consolidation or merger.

These covenants are subject to a number of important qualifications and exceptions in the Notes and the Indenture governing the Notes.

Optional Redemption

At any time prior to 26 June 2022, the Company may at its option redeem the Notes, in whole but not in part, at a redemption price equal to 100% of the principal amount of the Notes plus the applicable premium as of, and accrued and unpaid interest, if any, to (but not including) the redemption date. Neither the Trustee nor any of the agents shall be responsible for calculating or verifying the applicable premium.

At any time and from time to time prior to 26 June 2022, the Company may redeem up to 35% of the aggregate principal amount of the Notes with the net cash proceeds of one or more sales of common stock of the Company in an equity offering at a redemption price of 110.875% of the principal amount of the Notes, plus accrued and unpaid interest, if any, to (but not including) the redemption date; provided that at least 65% of the aggregate principal amount of the Notes originally issued on the Closing Date remains outstanding after each such redemption and any such redemption takes place within 60 days after the closing of the related equity offering.

Reasons for the Notes Issue and the Proposed Use of Proceeds

The Group is a leading developer and operator of large-scale, integrated logistics and trade centers in the PRC, based on GFA, industry coverage and range of ancillary services and facilities offered. Leveraging the Group's experience and brand reputation, the Group currently has eight projects in different stages of development located in regional economic hubs in Shenzhen, Nanning, Nanchang, Xi'an, Harbin, Zhengzhou, Hefei and Chongqing, the PRC.

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The estimated net proceeds of the Notes Issue, after deducting the underwriting discount and other estimated expenses payable in connection with the Notes Issue, will be approximately US$216.42 million which will be used by the Company primarily to refinance existing indebtedness and for general corporate purposes.

The Company may adjust the foregoing plans in response to changing market conditions, change in government policies or other factors and thus, the Company will carefully evaluate the situation and may reallocate the use of the proceeds for different uses.

Listing and Rating

Application will be made for the listing of the Notes on the SGX-ST. Admission of the Notes to the SGX-ST is not to be taken as an indication of the merits of the Company or the Notes. No listing of the Notes has been or will be sought in Hong Kong.

The Notes are expected to be rated "B" by Fitch Ratings, Inc.

DEFINITIONS

In this announcement, the following expressions have the meanings set out below unless the context requires otherwise:

"2016 Notes"	the US$350,000,000 6.75% senior notes due 2021 September
	issued by the Company
"2017 March Notes"	the US$300,000,000 5.75% senior notes due 2020 March
	issued by the Company
"2017 November Notes"	the US$300,000,000 7.25% senior notes due 2022 November
	issued by the Company
"2018 January Notes"	the US$250,000,000 7.25% senior notes due 2021 January
	issued by the Company
"2018 May Notes"	The US$250,000,000 10.875% senior notes due 2020 August
	issued by the Company
"2019 March Notes"	The US$260,000,000 11.875% senior notes due 2021 March
	issued by the Company
"2019 December Notes"	The US$350,000,000 11.5% senior notes due 2022 February
	issued by the Company
"Announcement"	the announcement of the Company dated 19 February 2020
	in relation to the Notes Issue
"Barclays"	Barclays Bank PLC
"Board"	the board of Directors

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"BOC International"	BOCI Asia Limited
"CCB International"	CCB International Capital Limited
"China Everbright Bank	China Everbright Bank Co., Ltd., Hong Kong Branch
Hong Kong Branch"
"Closing Date"	26 February 2020
"CMB International"	CMB International Capital Limited
"Company"	China South City Holdings Limited, a company incorporated
	in Hong Kong with limited liability, the issued Shares of
	which are listed on the Main Board of the Stock Exchange
	(Stock Code: 1668)
"Credit Suisse"	Credit Suisse (Hong Kong) Limited
"Directors"	The directors of the Company
"Dollar Equivalent"	with respect to any monetary amount in a currency other than
	US dollars, at any time for the determination thereof, the
	amount of US dollars obtained by converting such foreign
	currency involved in such computation into US dollars at the
	base rate for the purchase of US dollars with the applicable
	foreign currency as quoted by the Federal Reserve Bank of
	New York on the date of determination
"Exempted Subsidiary"	any Restricted Subsidiary (including, for the avoidance of
	doubt, any Restricted Subsidiary that is not wholly-owned
	by the Company) organized in any jurisdiction other than
	the PRC that is prohibited by applicable law or regulation
	from providing a Subsidiary Guarantee or a JV Subsidiary
	Guarantee
"GFA"	Gross floor area, which comprises the total floor area
	contained within the external walls of a building
"Group"	the Company and its subsidiaries
"Guotai Junan International"	Guotai Junan Securities (Hong Kong) Limited
"Haitong International"	Haitong International Securities Company Limited
"HeungKong Financial"	HeungKong Securities Limited
"Holder"	a holder of the Notes

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"Hong Kong"	the Hong Kong Special Administrative Region of the
	People's Republic of China
"Indenture"	the written agreement to be entered into amongst the
	Company, the Subsidiary Guarantors and the Trustee that
	specified the terms of the Notes including the interest rate of
	the Notes and the maturity date
"JV Subsidiary	a limited-recourse guarantee which may replace a Subsidiary
Guarantee"	Guarantee required to be provided by a subsidiary of the
	Company
"JV Subsidiary	a Restricted Subsidiary that executes a JV Subsidiary
Guarantor"	Guarantee
"Kaisa Financial Group"	Kaisa Financial Group Company Limited
"Listed Subsidiary"	any Restricted Subsidiary any class of the capital stock of
	which is listed on a qualified exchange or quoted on the
	National Equities Exchange and Quotation System in the
	PRC and any subsidiary of a Listed Subsidiary
"Non-Guarantor	any Restricted Subsidiaries organized under the laws of the
Subsidiaries"	PRC, any Exempted Subsidiary and any Listed Subsidiary,
	together with any designated Non-Guarantor Subsidiary
"Notes"	the US$225,000,000 10.875% senior notes due 2022 to be
	issued by the Company
"Notes Issue"	the issuance of the Notes by the Company
"Orient Securities	Orient Securities (Hong Kong) Limited
(Hong Kong)"
"PRC"	the People's Republic of China excluding, for the purpose
	of this announcement, Hong Kong, the Macau Special
	Administrative Region and Taiwan
"Purchase Agreement"	the agreement entered into between, among others, the
	Company, the Subsidiary Guarantors, UBS, Barclays, Credit
	Suisse, Guotai Junan International, Haitong International,
	BOC International, CCB International, China Everbright
	Bank Hong Kong Branch, CMB International, HeungKong
	Financial, Kaisa Financial Group and Orient Securities (Hong
	Kong) in relation to the Notes Issue
"Restricted Subsidiary"	any subsidiary of the Company other than an Unrestricted
	Subsidiary

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"Securities Act"	the United States Securities Act of 1933, as amended
"SGX-ST"	Singapore Exchange Securities Trading Limited
"Share(s)"	ordinary share(s) in the share capital of the Company
"Shareholder(s)"	holder(s) of the Share(s)
"Significant Restricted	a Restricted Subsidiary, including its Subsidiaries, which
Subsidiary"	meets any of the following conditions: The Company's and
	its other subsidiaries' investments in and advances to such
	Restricted Subsidiary exceed 5% of the total assets of the
	Company and its subsidiaries consolidated as of the end of
	the most recently completed fiscal year; or the Company's
	and its other subsidiaries' proportionate share of the total
	assets (after intercompany eliminations) of such Restricted
	Subsidiary exceeds 5% of the total assets of the Company
	and its subsidiaries consolidated as of the end of the most
	recently completed fiscal year; or the Company's and its
	other subsidiaries' equity in the income from continuing
	operations before income taxes, extraordinary items and
	cumulative effect of a change in accounting principle of such
	Restricted Subsidiary exclusive of amounts attributable to
	any non-controlling interest exceeds 5% of such income of
	the Company and its subsidiaries consolidated for the most
	recently completed fiscal year
"Stock Exchange"	The Stock Exchange of Hong Kong Limited
"Subsidiary Guarantee"	any guarantee of the obligations of the Company under the
	Indenture and the Notes by any Subsidiary Guarantor
"Subsidiary Guarantors"	the subsidiaries of the Company which provide a guarantee
	for the payment of the Notes provided that those Subsidiary
	Guarantors will not include any subsidiaries of the Company
	established under the laws of the PRC
"Trustee"	Citicorp International Limited
"UBS"	UBS AG Hong Kong Branch
"United States"	the United States of America
"Unrestricted Subsidiary"	(1) as of the Closing Date, Rosy Fountain Investments
	Limited; (2) any subsidiary of the Company that at the
	time of determination shall be designated an Unrestricted
	Subsidiary by the board of directors of the Company in the
	manner provided in the Indenture and (3) any subsidiary of
	an Unrestricted Subsidiary
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"US$"	United States dollar, the lawful currency of the United States
	of America
"%"	per cent.

For and on behalf of the Board

China South City Holdings Limited

CHENG Chung Hing

Chairman & Executive Director

Hong Kong, 20 February 2020

This announcement has been translated into Chinese. If there is any inconsistency between the English version and the Chinese version, the English version shall prevail.

As at the date of this announcement, the executive directors of the Company are Mr. Cheng Chung Hing, Mr. Fung Sing Hong Stephen, Mr. Zhao Lidong and Ms. Cheng Ka Man Carman; the non-executive directors of the Company are Dr. Ma Kai Cheung, SBS, BBS, Mr. Cheng Tai Po and Mr. Lin Ching Hua; and the independent non-executive directors of the Company are Mr. Leung Kwan Yuen Andrew, GBS, SBS, JP, Mr. Li Wai Keung, Mr. Hui Chiu Chung, JP and Mr. Yung Wing Ki Samuel, SBS, MH, JP.

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