China’s Kaisa starts fast exchange, solicitation for notes due Dec. 7

Chicago, Nov. 29 – Kaisa Group Holdings Ltd. started an exchange offer and consent solicitation for its $400 million outstanding 6˝% senior notes due 2021 (ISIN: XS2268673337), according to an announcement.

The company is offering to exchange at least $380 million, or 95%, of the notes. If the final acceptance rate is below 95%, the exchange offer and consent solicitation will lapse automatically.

The company is also soliciting consents to proposed waivers and amendments.

The aim is to extend the maturity profile of the notes.

Tightening government policy and deteriorating consumer sentiment have played a part in the financing environment for the company.

Additionally, Kaisa has missed two interest payments in November on two notes and the company was downgraded by Moody’s Investors Service, S&P Global Ratings and Fitch Ratings making refinancing more challenging.

The company is within the 30-day grace period for the missed coupons.

If the exchange offer and consent solicitation are not successful for the notes that mature Dec. 7, the company may not be able to repay the existing notes at maturity and may have to consider an alternative debt restructuring exercise.

Offer

The company is offering to exchange $1,000 of existing notes for $25 in cash, $1,000 of new 6˝% notes due June 6, 2023 and capitalized interest.

Interest on the new notes can be paid in cash, or at a 7˝% rate if paid in kind.

The exchange offer expires at 11 a.m. ET on Dec. 2.

Eligible holders must tender all of the notes they hold for exchange.

Waivers and amendments to the existing notes would waive all rights holders have on the existing notes and discharge the company from claims of the noteholders, including all accrued and unpaid interest.

Tendering noteholders will be deemed to have given consents to the proposed waivers and amendments.

Details

If successful, the supplemental indenture will be executed on Dec. 6.

The new notes would be listed on the SGX-ST on Dec. 6.

Haitong International Securities Co. Ltd. is the dealer manager (fax: 852 2840 1680).

Morrow Sodali is the information, exchange and tabulation agent (+44 20 4513 6933, +852 2319 4130, kaisa@investor.morrowsodali.com, https://bonds.morrowsodali.com/kaisa).

Kaisa Group is a Shenzhen, China-based property development company.

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