China’s Kaisa offers new notes, cash in exchange for series A-E notes

By Susanna Moon

Chicago, June 7 – Kaisa Group Holdings Ltd. is offering to swap out its series A, B, C, D and E notes until 11 a.m. ET on June 21.

In exchange for each $1,000 principal amount, Kaisa is offering new notes and cash plus accrued interest, according to a company notice.

As announced May 23 the company has set a meeting for June 12 to ask shareholders to approve the issuance of exchange convertible bonds as part of the company’s offshore debt restructuring.

The new notes will be issued in a minimum principal amount of $200,000 and in integrals of $1,000 after that.

The exchange value will be as follows for each $1,000 principal amount:

• For series A notes or series B notes, $1,000 principal amount of any series of new notes or a combination;

• For series C notes or the series D notes, $1,000 principal amount of any series of new 2021 notes, the new 2022 notes or the new 2024 notes or a combination; and

• For series E notes, $1,000 principal amount of any series of new 2022 notes or the new 2024 notes or a combination.

Holders also will receive cash for each $1,000 principal amount of notes tendered for exchange, with the cash amounts announced at the same time as the minimum yields of the new notes on June 14.

The company said it plans to pay the cash out of its own internal funds.

At the same time as the exchange, the company said it plans to price a separate offering of new notes with proceeds to be used to redeem notes and any remainder for general corporate purposes.

Credit Suisse, China Citic Bank International, BOC International and Deutsche Bank are the initial purchasers, lead managers and joint bookrunners as well as dealer managers for the exchange.

Settlement has been set for June 30.

Kaisa Group, a Shenzhen, China-based property development company, filed bankruptcy on May 5, 2016 in the U.S. Bankruptcy Court for the Southern District of New York to gain U.S. court recognition of its Hong Kong scheme proceedings. The Chapter 15 case number is 16-11303.

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