HONG KONG :Developers China Evergrande Group and Kaisa Group were downgraded to"restricted default" by rating agency Fitch due to non-payment of offshore bond dues, while a source said Kaisa had started work on restructuring its US$12 billion offshore debt.
The non-payment has triggered an"event of default" on Evergrande's bonds and its other U.S. dollar notes will become due immediately and payable if the bond trustee or holders of at least 25per cent in aggregate amount declare so, Fitch said. Evergrande, which has over US$300 billion in liabilities and is at the heart of a property crisis in China, said last week that it planned to forge ahead with a restructuring of its debt.Kaisa is expected to soon sign a non-disclosure agreement with Lazard, the adviser of a group of bondholders, the source and another person told Reuters. The bondholders hold over 25per cent of Kaisa's US$12 billion offshore bonds.
The group of Kaisa offshore bondholders, who say they own 50per cent of the notes that were due on Dec. 7, sent the company draft terms of forbearance late on Monday.
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