A group of Kaisa Group’s offshore bondholders have agreed to buy up to $1bn Kaisa’s bad loans from its onshore creditors, as per two sources. Kaisa is working to restructure its offshore debt after the cross-default, a source told Reuters, adding that the bondholder group, which holds an overall $5.5bn of Kaisa’s total offshore bonds last month proposed options including $2bn in fresh debt to the developer. However, no material results are out yet. FT does note that the talks signal that the restructuring processes for real estate businesses in China are reaching more advanced stages in general. Analysts note that the acquisition of Kaisa’s bad loans will also help the recovery of offshore bondholders by preventing current onshore creditors from liquidating assets.
Kaisa’s dollar bonds are slightly lower today, trading at ~30 cents on the dollar.
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