China’s Kaisa sets minimum yields, cash amounts in exchange offer

By Susanna Moon

Chicago, June 14 – Kaisa Group Holdings Ltd. announced the minimum yields for the new notes to be issued in the exchange offer for its series A, B, C, D and E notes.

The minimum yield will be 7¼% per year for the new 2020 notes, 7 7/8% for the new 2021 notes, 8½% for the new 2022 notes and 9 3/8% for the new 2024 notes, according to a company update on Wednesday.

As announced June 7, Kaisa is offering new notes and cash plus accrued interest in exchange for each $1,000 principal amount of the five series until 11 a.m. ET on June 21.

Holder will receive a cash amount of $2.50 per $1,000 principal amount, which will be paid out of the company’s internal funds, the release added on Wednesday.

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.

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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