The loan package being negotiated for the acquisition of The Center tower in Hong Kong is becoming more expensive, Bloomberg News reported, citing people familiar with the matter.
The latest negotiations have increased the interest margin by 10 basis points on the HK$16.08 billion one-year senior bridge loan to 140 basis points over the Hong Kong Inter-bank Offered Rate, or HIBOR, from the previous 130 basis points.
The new all-in translates to 190 basis points from 180 basis points, the news outlet noted, citing people, who asked not to be named as the information has not been publicly disclosed.
The asset is being sold by CK Asset Holdings Ltd. for HK$40.2 billion to a consortium of buyers. China Energy Reserve and Chemicals Group Co. Ltd. was originally slated to take a 55% stake in the special purpose vehicle set up to acquire the property but backed out in February. The move may have been due to difficulties in moving capital out of China.
The buyer group then enlisted Shimao Property Holdings Ltd. Chairman Hui Wing Mau and Kingston Financial Group Ltd. co-founder Pollyanna Chu Yuet Wah as new sponsors.
The purchasing entity is CHMT Peaceful Development Asia Property Ltd.
The news outlet noted that the pricing for a HK$16.88 billion one-year mezzanine financing that complements the senior debt is unchanged at 2% upfront free, 2% cash interest and 4% payment-in-kind.
