(The following item was previously published by Basis Point, a Thomson Reuters publication)
HONG KONG, Jan 4 (Reuters Basis Point) - Fortune Real Estate Investment Trust is seeking a HK$1.4bn three-year syndicated loan to acquire two retail properties in Hong Kong, namely Belvedere Garden and Provident Centre, sources told Thomson Reuters Basis Point.
Besides the new HK$1.4bn loan, Fortune REIT will also back the acquisition with funds from an existing revolving credit under its HK$3.8bn syndicated financing completed in May 2011.
ANZ, DBS Bank and Standard Chartered Bank are leading the new HK$1.4bn fully underwritten syndicated financing which consists of a HK$1.1bn term loan and a HK$300m revolving credit.
Sources said the deal, paying a margin of 200bp over Hibor, could be launched to syndication as early as this week. But only a few selected banks would be invited.
The 200bp margin is significantly higher than the 91bp the borrower paid in May last year for the HK$3.8bn five-year loan.
Sources said recent market turmoil had pushed loan pricing up. And the 200bp margin was exactly what Fortune REIT paid in September 2009 (post-Lehman crisis) on a HK$3.1bn facility.
Last May's facility was joined by ANZ, DBS, StanChart, Bank of Nova Scotia, Chinatrust Commercial Bank and First Commercial Bank.
Fortune REIT, a unit of blue-chip developer Cheung Kong (Holdings) Ltd, currently holds a portfolio of 14 retail malls and properties in Hong Kong.
The newly acquired Belvedere Garden in Tsuen Wan has a purchase price of about HK$1.25bn, while Provident Centre in North Point has a purchase price of about HK$650m, according to a filing by Fortune REIT to the Hong Kong stock exchange. (Reporting by Jacqueline Poh)
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