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KWG Property secures US$500M term loan for Hong Kong site development

KWG Property Holding Ltd. signed an agreement with a group of banks for a US$500 million Hong Kong dollar and U.S. dollar dual-currency term loan facility to fund a Hong Kong property project it is jointly developing with Longfor Properties Co. Ltd.

The term loan carries a greenshoe option and will mature in 48 months from June 5, according to a filing.

The loan facility is being extended by a group that includes original lenders The Hongkong and Shanghai Banking Corp. Ltd. and Standard Chartered Bank (Hong Kong) Ltd. The two banks are also serving as mandated lead arrangers and book runners for the loan, while Standard Chartered Bank (Hong Kong) Ltd. is acting as the agent for the deal.

The two Chinese developers formed a 50/50 joint venture company, Fancy Excellent Ltd., to oversee the development of the Kowloon Inland Lot No. 6567 at Kai Tak Area 1K Site 1 in Kowloon, Hong Kong. The partners purchased the 9,721-square-meter Kai Tak site for HK$7.23 billion in May 2017.

The Guangzhou, China-headquartered KWG will also guarantee up to half of the repayment obligations of the project company, which is a unit of Fancy Excellent, according to a separate filing. KWG's loan guarantee will cover the project company's term loans amounting up to an aggregate principal amount of HK$5.09 billion.

Longfor will provide the guarantee for the remaining 50% of the project company's loan facility obligations.