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November 23, 2021
By Anshuman Daga
SINGAPORE (Reuters) – Some offshore bondholders of embattled Chinese developer Kaisa Group who did not receive coupon payments this month have tapped investment bank Moelis & Co to advise them on the matter, a source with direct knowledge told Reuters on Tuesday.
Kaisa, which has the most offshore debt of any Chinese developer after China Evergrande Group, has not paid coupons totalling over $59 million due on Nov. 11 and 12, with 30-day grace periods for both.
The Shenzhen-based developer has a $400 million maturity on another dollar bond due on Dec. 7.
Bloomberg reported earlier on Tuesday that an ad hoc group of offshore bondholders is also seeking advice from lawyers at Kirkland & Ellis, besides Moelis.
Kaisa declined to comment. There was no immediate comment from Moelis and Kirkland & Ellis to a Reuters query sent outside U.S. working hours.
Chinese developers are facing an unprecedented liquidity squeeze due to regulatory curbs on borrowings, causing a string of offshore debt defaults, credit rating downgrades and sell-offs in some developers’ shares and bonds in recent weeks, with Evergrande at the centre of the crisis.
Evergrande, the world’s most indebted developer, has been stumbling from debt-repayment deadline to deadline as it grapples with more than $300 billion in liabilities. Moelis and Kirkland & Ellis are advising a group of offshore bond holders of Evergrande.
Fitch downgraded Kaisa’s Long-Term Foreign-Currency Issuer Default Rating to “C” from “CCC-” last week on the missed coupon payments.
The developer, which has also missed some payments on its wealth management products onshore, had pleaded for help from creditors this month and said it will not pay interim dividends.
Kaisa is scrambling for money to repay its debts by asset disposals. Reuters reported last month it was seeking buyers for its Hong Kong-listed property management unit Kaisa Prosperity Holdings and two residential sites in the city. One of the sites have been sold recently, one source with direct knowledge said.
(Reporting by Anshuman Daga; Additional reporting by Scott Murdoch; Writing by Clare Jim; Editing by Muralikumar Anantharaman)
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