BONDS of Shenzhen-based property developer Kaisa Group, which last year became the first Chinese developer to default on offshore debt, rallied Friday after it sweetened a debt restructuring proposal, boosting hopes it would be implemented after months of wrangling.

    The firm, which owes US$2.5 billion to offshore creditors, said late Thursday it had altered the restructuring proposal that was offered to offshore creditors in December in a way that investors would now get higher coupons and amended payments contingent upon certain milestones.

    Kaisa’s bonds rose by 1-2 points in price across maturities, with the 2018 trading as high as 80 cents on the dollar. Trading in the company’s shares have been suspended since March last year.

    The company said the changes followed negotiations with a group of creditors led by Farallon Capital Asia Pte Ltd. and BFAM Partners, two funds that had opposed the earlier proposal. They own around 24 percent of the outstanding bonds.

    “BFAM and Farallon are pleased to have come to a consensual resolution with Kaisa, which has achieved a significant improvement for all bondholders,” the two bondholders said in a joint statement.

    Under the new terms, bondholder net present value would rise to around 79 percent from the earlier 75 percent, analysts say.

    In January, a group of bondholders, who were opposed to the company’s earlier debt recast plan, made an alternate proposal that would offer investors a net present value of 87 percent.

    The company had rejected that proposal, saying it was “not commercially viable in the current environment.” (SD-Agencies)