[ET Net News Agency, 30 March 2015] Moody's Investors Service said that the uncertainty
regarding a timely completion of Sunac China Holdings Limited's (B1 stable)(01918)
acquisition of Kaisa Group Holdings Ltd (Ca, review for upgrade)(01638) has increased
following the rejection by offshore bondholders of the initial proposal on debt
restructuring and the prolonged state of negotiations between the bondholders and Kaisa.
"We would therefore consider revising the ratings outlook to negative or downgrading
Kaisa's ratings if the Sunac acquisition is unlikely to complete and the expected recovery
value for offshore bondholders is lower than expected," said Franco Leung, a Moody's Vice
President and Senior Analyst.
Kaisa had planned to reach a preliminary understanding with lenders and bondholders by
end-March 2015 and to complete the restructuring of its onshore and offshore debt by
end-April 2015, based on its announcement dated 11 February.
On 22 March, it announced that it had not yet reached an agreement with its offshore
bondholders on its restructuring proposal for outstanding offshore bonds, thereby missing
the initially proposed 20 March deadline.
Moody's current review for upgrade of Kaisa's ratings reflects Moody's expectation that
Sunac's acquisition, if completed, will significantly improve the repayment prospects for
Kaisa's creditors, including its offshore bondholders.
Moody's believes the company failed to make the coupon payments on 18 and 19 March for
its 12.875% senior notes due 2017 and 8.875% senior notes due 2018. (KL)
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