Distressed Chinese developer Logan Group (3380) secured a US$1 billion (HK$7.8 billion) private loan for refinancing, people familiar with the matter said, a move that increases the chances for its restructuring to move forward. The loan taken jointly with KWG Group Holdings (1813), was arranged by JP Morgan Chase and signed late Saturday, according to the people.
The original HK$10.2 billion facility was backed by the Hong Kong luxury real estate project, The Corniche, and was set to mature August 25, according to data compiled by Bloomberg. The newly secured refinancing will pave a path forward for Logan to restructure its US$8 billion of offshore debt.
While The Corniche loan isn't included in the firm's restructuring, it's been at the center of negotiations as the developer's ability to secure refinancing for the project is viewed as a bellwether for how viable its debt plan is likely to be. Private equity and credit firms Davidson Kempner Capital Management and Dignari Capital Partners HK provided US$250 million each, according to the people. Financial firms RRJ Capital and Deutsche Bank AG each lent $200 million and Pacific Investment Management provided US$150 million, they said.
The size of the new borrowing facility of US$1.05 billion is smaller than the original US$1.3 billion loan after the two developers paid down some of the outstanding debt, according to one of the people familiar.
The private loan has an annualized yield of 13 percent, a tenor of 30 months, and two six-month extension options, the people said. Alternative asset manager Ares Management placed a bid for the loan in April ultimately did not take part in the lending. Bloomberg.
