Chinese Developer Kaisa Misses Bond Payments – MarketWatch

By P.R. Venkat

Kaisa Group Holdings Ltd. said Monday that it has missed payments on various senior notes and that it is in talks for a debt restructuring with bondholders.

The Chinese developer didn’t make payment on a US$400 million, 6.5% senior note that matured Dec. 7 and missed out on interest payments of three other bonds.

Failures to repay investors are piling up in China’s property sector, as businesses are pressured due to falling home sales, government curbs on borrowing and a bond-market selloff that has all but shut the market for new deals.

In recent months, smaller companies including Fantasia Holdings Group Co., Modern Land (China) Co. and Sinic Holdings Group Co. have defaulted. On Friday, S&P Global Ratings downgraded China Evergrande Group to one of its lowest possible ratings, judging the property giant to be in default after failing to make its debt payments.

Shenzhen-based Kaisa is one of the Chinese property sector’s biggest offshore borrowers after Evergrande. To date, Kaisa said its outstanding principal amount of senior notes stood at US$11.78 billion.

The non-payments may lead to creditors demanding for acceleration of repayment, although no such notices have been received so far, Kaisa said.

Kaisa has appointed Houlihan Lokey as its financial adviser to assess the group’s capital structure and explore feasible solutions to ease the current liquidity issue.

The company also warned that the confidence of potential property purchasers remains weak in December, further reaffirming the stress faced by the sector.

Shares of Kaisa, which have been on trading halt since Dec. 8 on the Hong Kong stock exchange, will resume trading Monday.

Write to P.R. Venkat at

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