Kaisa exchange offer, consent solicitation for 6˝% notes lapse

By Marisa Wong

Los Angeles, Dec. 3 – Kaisa Group Holdings Ltd. announced that the minimum condition was not met under its exchange offer and consent solicitation for its $400 million outstanding 6˝% senior notes due Dec. 7, 2021 (ISIN: XS2268673337). As a result, the exchange offer and consent solicitation will lapse automatically, according to a company announcement on Friday.

The company was offering to exchange at least $380 million, or 95%, of the notes. The exchange offer and consent solicitation will not proceed, because the company received tenders of notes of less than that 95% minimum acceptance amount.

As of Dec. 3, $400 million of the notes remain outstanding and will mature on Dec. 7.

The company said it has been in discussions with representatives of some noteholders. As of Friday, no legally binding agreement has been entered into.

To ease the current liquidity issue and reach an optimal solution for all stakeholders, the company is assessing and is closely monitoring the financial condition and cash position of the group. It will explore feasible solutions, including but not limited to renewal and extension of borrowings and disposing of assets, according to Friday’s announcement.

The company said there is no guarantee that it will be able to meet the repayment obligations under the existing notes at maturity.

If the company is unable to repay the notes at maturity or agree with its holders on alternative arrangements, this would have a material adverse effect on the group’s financial condition.

Offer details, background

The exchange offer began on Nov. 25 and expired at 11 a.m. ET on Dec. 2.

The company was also soliciting consents to proposed waivers and amendments. The aim was 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 had missed two interest payments in November on two notes and the company had been 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.

The company was 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 could be paid in cash, or at a 7˝% rate if paid in kind.

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

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

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

Had the solicitation been successful, the supplemental indenture would have been executed on Dec. 6, with listing of the new notes on the Singapore Exchange also slated for Dec. 6.

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

Morrow Sodali was 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.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.