Central, Central, the buyer informed by Jiucheng find involved 36.2 billion 40% rare mezzanine loans
Cheung Kong (01113) sold 75% of Central’s Central Plains at 99 Queen’s Road Central for $ 40.2 billion last month. Markets such as China Hong Kong, Macao, Qingdao and Tai Ping An Asian Real Estate are rumored to be seeking 90% of the transaction amount, (About 36.18 billion yuan) of which 40% of the financing is to be financed by mezzanine financing like two-market or transitional loans, with a loan interest rate as high as 8% for one year.
Eight cents per annum are non-collateralized
Reuters quoted sources and financing documents that Central Center buyers are seeking financing up to 90% of the transaction amount of the acquisition, of which about four into a one-year mezzanine financing, the interest rate as high as 8%; as for the remaining 50% of the funds will be through Priority loan to raise. Reuters reports that failed to contact China Hong Kong, Macao and Taiwan and Pacific Development of Asian real estate companies to comment on the financing rumors.
The report also pointed out that most property buyers in Hong Kong will seek about 40% to 50% of the financing amount of the acquisition, but the use of mezzanine financing is not common. As these types of financing require less collateral, interest rates generally range from 6 to 10%. Such financing is often used as a transitional arrangement where the rate of financing is high and the rate of return on investment in Hong Kong is low.
As Hong Kong banks have restrictions on real estate borrowing no more than 50% of the transaction volume, so the mezzanine financing or may be provided by other fund companies, financing documents show that the consortium needs to finalize the financing by March. Some market participants pointed out that mezzanine financing similar to two presses, by the finance company, financing companies, and even hedge funds, due to less collateral, or even no collateral, the default if the borrower failed to repay, the claim is also in the After a bank loan with collateral, the interest rate is much higher than a secured loan.
As to whether the relevant financing has touched the guidance of the Hong Kong Monetary Authority on bank lending to property developers, a spokesman for the HKMA said in a reply that it will not comment on lending transactions reported on individual markets. Generally speaking, banks should decide whether to provide financing in accordance with the prudent principle of credit risk management and the applicable guidelines of the HKMA and analyze the relevant factors such as the repayment ability of the borrower.
It is reported that China and Hong Kong, Macao and overseas Chinese peacefully developing Asian real estate is a major shareholder of China State Reserve Energy Chemical Group, about 55% interest, the remaining 45% by an active group of investors in the commercial property market in Hong Kong, including the “tape king” Chen Bingzhi, founder of Asian real estate Tsai Chih-chung, senior investor Lo Chu Hung and “minibus king” Ma Ya Mu and so on. China State Reserve Energy and Chemical will use its own 20-story floor, other investors hold the floor, tentatively inclined to consider the sale after the sale.
Disposal or obstruction of bank priority loans
Reuters quoted bank sources as saying that any plan to divest some properties may cause some banks to hesitate to participate in priority loans as they may complicate repayment commitments.
Central Central’s transaction volume hit record highs in Hong Kong’s traded unit price. The report said that the transaction reflected Chinese investors’ expansion into commercial buildings in Asia. More than half of the rental space in Hong Kong has been recuperated by Chinese companies, many of them The company finances by lending in Hong Kong.