China’s Kaisa announces results in exchange for A, B, C, D E notes

By Wendy Van Sickle

Columbus, Ohio, June 21 – Kaisa Group Holdings Ltd. announced the results in the exchange offer for its series A, B, C, D and E notes.

The company said it received tenders for exchange of:

• $259,628,000, or about 90.92%, of the existing series A notes;

• $483,019,000, or about 93.97%, of the existing series B notes;

• $592,159,000, or about 94.26%, of the existing series C notes;

• $648,505,000, or about 94.63%, of the existing series D notes; and

• $674,626,000, or about 90.87%, of the existing series E notes.

As announced June 7, Kaisa offered 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.

On June 14, Kaisa said 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.

The company expects to issue as a result of the exchange offer $228.13 million of the new 2020 notes; $215,385,000 of the new 2021 notes; $796,919,000 of the new 2022 notes; and $1,417,503,000 of the new 2024 notes, according to a company update on Wednesday.

Kaisa added that it will announce final pricing details of the new notes “in due course.”

Holders will receive a cash amount of $2.50 per $1,000 principal amount, which will be paid out of the company’s internal funds

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 company previously said 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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