Kaisa dangles bond exchange offer to avert default

kaisa dangles bond exchange offer to avert default

Sumary of Kaisa dangles bond exchange offer to avert default:

  • HONG KONG • Chinese developer Kaisa Group Holdings began an exchange offer for at least US$380 million (S$520 million) of bonds to avert a default during the nation’s real estate cash crunch.
  • The builder has offered to exchange at least 95 per cent of its US$400 million 6.5 per cent note maturing on Dec 7 for new notes with the same coupon maturing in June 2023. If the offer to bond holders fails, the developer may not be able to repay bonds and could consider a debt restructuring, it said in a stock exchange filing yesterday.
  • Kaisa’s bonds fell, while its shares jumped as the stock resumed trading following a three-week halt.
  • In a move that may boost cash, a venture of the developer agreed to sell a land site in Hong Kong, a separate statement showed.
  • Kaisa is the latest real estate firm trying to shore up its finances as a debt crisis originally centred on China Evergrande Group engulfs the industry.
  • “Despite our efforts to reduce our interest-bearing debt in response to government regulations, the current sharp downturn in the financing environment has limited our funding sources to address the upcoming maturities,” Kaisa said in the statement.
  • Kaisa is one of China’s largest issuers of high-yield United States dollar bonds, with more than US$11 billion of notes outstanding.

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