Kaisa bonds fall on payment fears

Bonds of Kaisa Group Holdings Ltd fell to record lows on Tuesday amid speculation the Chinese developer will miss more debt obligations this week as Standard & Poor's cut its credit rating to selective default.

The company's $800 million of 8.875 percent notes due 2018 tumbled 13.4 cents to 33.3 cents on the dollar in Hong Kong, according to Bloomberg-compiled prices, sending yields up 16 basis points to 55.7 percent. Its January 2020 notes plunged 10.5 cents to 33.3 cents, yielding 44.6 percent. Their 10.5 percent semi-annual coupon comes due later this week.

"The possibility of Kaisa missing the coupon on its 2020 notes is very real, given its inability to repay the loan last week," said Charles Macgregor, head of Asian high-yield research in Singapore at Lucror Analytics Pte.