Kaisa Group in talks with banks on dollar-bond sale

HONG KONG • Chinese property developer Kaisa Group Holdings is in talks with banks in relation to a dollar-denominated bond issuance, according to people familiar with the matter who are not authorised to speak publicly and asked not to be identified.

The firm’s new funding plan comes amid a sharp drop in junk bond yields that has propelled new bond sales among high yield issuers in the region, particularly Chinese property developers as they look to refinance debt. Two phone calls to Kaisa’s media department went unanswered.

A potential dollar bond sale by Kaisa would be its second offshore issuance since it completed a restructuring following a landmark dollar-bond default in 2015.

Kaisa sold US$3.45 billion (RM13.42 billion) of notes in June last year to replace the securities it issued to repay creditors in that restructuring to extend its debt maturity profile.

Chinese builders have sold US$16 billion of dollar bonds this year through April 17, a 45% jump from the year-earlier period, according to Bloomberg-compiled data.

“Chinese property developers — including Kaisa — are looking for opportunities to come to the offshore bond market as they bought a lot of land last year and some of the land premium hasn’t been paid yet,” Yin Chin Cheong, an analyst at Credit-Sights in Singapore. “Also they are trying to prefund in the dollar bond market ahead of rate hikes later this year.” — Bloomberg