Chinese developers Logan and KWG use Hong Kong project to refinance US$1 billion loan
- Logan Group and KWG Group Holdings signed a US$1.05 billion refinancing deal arranged by JPMorgan to roll over a loan due on August 25, sources said
Two cash-strapped mainland Chinese developers have secured a private loan to refinance a US$1 billion facility using a luxury property in Hong Kong as collateral, according to people familiar with the matter.
Logan Group and KWG Group Holdings signed the US$1.05 billion refinancing deal with a group of investors over the weekend, according to sources who requested anonymity. The private loan, which has a tenor of 30 months and two six-month extension options, was arranged by JPMorgan Chase ahead of the loan’s maturity on August 25, the sources added.
Dignari Capital Partners (HK), Davidson Kempner Capital Management, RRJ Capital, Pacific Investment Management and Deutsche Bank contributed to the lending facility backed by The Corniche joint venture property project, according to the sources.
“This now looks like a bridging loan since the interest rate is 13 per cent,” said Will Chu, senior research analyst for Hong Kong and China property at CGS International Securities. Lenders are willing to refinance the loan as the developers have taken action to lower the average selling price and sell some units, he added.
The developers declined to comment on the breakdown of the loan, but Bloomberg reported Davidson Kempner Capital and Dignari Capital each provided US$250 million. RRJ Capital and Deutsche Bank each extended US$200 million, while Pacific Investment provided US$150 million.
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The size of the new borrowing facility was smaller than the original HK$10.2 billion (US$1.3 billion) after both developers paid down some of the debt, according to one of the sources.
