S&P rates Kaisa convertibles B+

Standard & Poor's said it assigned a B+ issue rating to a proposed RMB 1.5 billion dollar-denominated settled convertible bond to be issued by Kaisa Group Holdings Ltd., which has BB- ratings and a stable outlook.

It will have a fixed-rate 8% coupon payable semi-annually.

The proceeds will be used for land acquisitions and other corporate purposes.

The rating is one-notch lower than the issuer rating to reflect structural subordination risks, the agency said.

The rating on the convertible bond is the same as the rating on the company's $350 million senior unsecured notes due 2015, S&P said.

A key term of the convertible bond is it will be redeemed at the U.S. dollar equivalent of its renminbi principal amount, together with unpaid accrued interests, the agency said.

The bond may be converted into shares at an initial conversion price of HK$2.82 per share on or after Jan. 30, 2011, S&P said.

Several of Kaisa's subsidiary guarantors will jointly guarantee the convertible bond, the agency added.

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