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Troubled Chinese developer Kaisa Group’s units have failed to repay an undisclosed amount of bank loans and other borrowings. As part of reassessing its repayment obligations to address liquidity issues, Kaisa said that it plans to offer bondholders an exchange of its $400mn 6.5% bonds due December 2021 for new notes maturing in June 2023  on a par-to-par basis, plus $25 in cash per $1,000 in principal and capitalised interest. With this Kaisa also launched a consent solicitation to waive the terms of its existing notes regarding restrictive covenants, modify events of default and other provisions. The new notes will have an interest of 6.5% payable entirely in cash or, if Kaisa elects to pay the interest in-kind on any interest payment date other than the maturity date, the the rate would be at 7.5%, payable semiannually in arrears. The exchange offer expires at 4pm London time on December 2, 2021.

This above offer comes after Kaisa stated that its “existing internal resources may be insufficient to repay the existing notes at maturity.” Kaisa added, “If the Exchange Offer and Consent Solicitation are not successfully consummated, we may not be able to repay the Existing Notes upon maturity on December 7, 2021, and we may consider alternative debt restructuring exercise.” Kaisa confirmed that it missed the $58.5mn in coupons on November 11 for its $1bn 11.7% 2025s and the $29.9mn coupon on November 12 for its $500m 11.95% 2023s. Kaisa has followed the along the footsteps of its peer Yango Group that also resorted to a similar measure in the beginning of November to avoid default.

Kaisa’s dollar bonds are lower across the curve by 0.6-0.8 points to ~35 cents on the dollar

For the exchange filing, click here

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