Article/Intelligence
New World Development Targets July-End Close for Proposed Victoria Dockside-Backed Loan
New World Development is targeting to close by the end of July the proposed three-year syndicated loan backed by its Hong Kong Victoria Dockside complex, according to two sources briefed on the matter.
As Octus reported on June 2, the loan’s arranger Deutsche Bank sent out a letter around the end of May inviting interested banks to join the proposed loan which it was initially targeting at HKD 4 billion ($509.6 million), but can be upsized to up to HKD 15.6 billion depending on interests received.
The bluechip Hong Kong developer controlled by the Cheng family was offering in May to pay HIBOR+105 bps for the loan, according to one of the two sources and a third source also briefed. Octus cannot ascertain if the margin has since changed.
Certain Hong Kong banks and Chinese banks had indicated interests to join the proposed loan citing good quality of the assets backing the loan, which includes the K11 Musea shopping mall and the Rosewood Hong Kong hotel on the Tsim Sha Tsui waterfront, as well as acceptable margin rates, according to the first, the third and a fourth source briefed on the matter.
But the same three sources also said the same banks also expressed concerns over adding more exposures to New World Development, which needs approval from the banks’ senior management.
Proceeds of the Victoria Dockside loan are for debt refinancing, including of bonds, perps and related loans, as reported.
As Octus reported, part of the Victoria Dockside loan proceeds were also to cover any shortfall for New World’s bank loan refinancing. But New World managed to complete by the end of June an around HKD 88.2 billion refinancing of existing unsecured loans, as the company announced on June 30.
The refinancing comprises: a new bank facility, which refinanced certain existing offshore unsecured financial indebtedness, and aligned bank facilities, which align its other existing offshore unsecured bank loans with the terms of the new bank facility, according to the company announcement.
The new bank facility consists of multiple tranches of bank loans with different maturities, with the earliest maturity date being June 30, 2028.
New World Development did not respond to requests for comment. Deutsche Bank declined to comment.
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