Cash-strapped Chinese builders Logan Group and KWG Group Holdings are close to signing a private loan to refinance a HK$10.2 billion (US$1.3 billion) facility that backed the development of luxury property The Corniche in Hong Kong, according to people familiar with the matter.
The borrowing, arranged by JPMorgan Chase, is likely to be signed with a group of investors and bondholders as early as this week, according to sources who asked not to be named. Dignari Capital Partners (HK), alternative investment management firm Davidson Kempner Capital Management, Singapore-based private equity firm RRJ Capital, American investment manager Pacific Investment Management and Deutsche Bank AG are among the largest lenders in the loan, according to the sources. Logan and KWG had informed creditors verbally and by email that they aimed to complete the refinancing on July 29, but there may have been a slight delay for technical procedures, according to sources close to the developers.
The refinancing should take place before the maturity date of August 25, the sources said. Investors are targeting a 13 per cent annualised yield for the new private deal, which has a tenor of 30 months and two six-month extension options, the people added. The three-year debt is a HK$10.
2 billion mortgage held by a group of banks including HSBC, Standard Chartered, and Industrial and Commercial Bank of China (Asia) to finance the project construction in 2021. The facility has around HK$8.5 billion in outst.