Kaisa's offshore bondholders to lose out

Offshore bondholders will suffer at the expense of equity holders in the Chinese developer’s latest debt-restructuring proposal, defying common capital structure norms.

Update Kaisa's conference call with bondholders in first subhead

Kaisa’s latest debt restructuring proposal will hurt offshore bondholders and benefit equity holders, creating concerns that common capital structure norms are not being practised.

The Chinese property developer, which has some $4.8 billion of debt maturing in the current financial year, announced in a Hong Kong exchange filing on Sunday that it plans to swap its outstanding high-yield bonds with new notes, offering terms that are unfavourable to existing offshore bondholders.

In the proposal, Kaisa which fell into financial distress amid project blockages and a corruption probe aims to extend the tenors of all...

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