Kaisa Shares Soar After Bond Restructuring Bid

nodetechno7 novembre 24, 2021

Shares in Chinese property developer Kaisa Group soared as much as 20% on Thursday on news that it wanted to extend the maturity of a $400 million bond by 18 months.

The extension is part of the company’s efforts to avoid a messy default and resolve a liquidity crisis.

Kaisa shares stood at HK$1.20 in late-morning trading in Hong Kong, up 19 Hong Kong cents or 18.8%. The stock has lost more than two-thirds of its value in the year to date.

In a filing, Kaisa said it would exchange its 6.5% offshore bonds due December 7 for new notes due June 6, 2023, at the same interest rate if at least 95% of holders accept.

Coupon Payments

Kaisa, which has the most offshore debt among Chinese developers after China Evergrande Group, missed coupon payments totalling $88.4 million due on November 11 and 12. The payments have a 30-day grace period.

Kaisa said a sharp downturn in the financing environment has limited its funding sources to meet upcoming maturities.

“If the exchange offer and consent solicitation are not successfully consummated, we may not be able to repay the existing notes upon maturity on December 7, and we may consider alternative debt restructuring exercise,” the company said in the filing.

Last week, Fitch Ratings downgraded Kaisa’s Long-Term Foreign-Currency Issuer Default Rating to ‘C’, from ‘CCC-‘, and its senior unsecured rating to ‘C’ from ‘CCC-‘, with the Recovery Rating maintained at ‘RR4’.

“The downgrade reflects the likelihood that Kaisa missed the interest payments on its senior unsecured notes and entered the consequent 30-day grace period before non-payment constitutes an event of default,” the agency said.