SJM Holdings Ltd. (880) and Success Universe Group Ltd. (487) are guaranteeing the equivalent of about $308 million in five-year syndicated loans to fund construction of the Ponte 16 resort in gambling mecca Macau.
The borrowing comprises a HK$1.9 billion ($244.8 million) loan and a 400 million yuan ($63.5 million) facility, Hoffman Ma, Success Universe’s Hong Kong-based deputy chairman, said in an interview today. Success Universe operates gaming, entertainment and tourist-related businesses.
The yuan loan pays a fixed rate of 3 percent while the Hong Kong dollar facility pays an all-in rate of 300 basis points over the Hong Kong interbank offered rate, Ma said. The company chose to seek yuan financing because there’s a lot of liquidity being made available in the currency to Macau casino and resort operators by Chinese banks, which are positive on the sector, Ma said.
“If there are central policies which encourage banks to lend to you when you’re getting a loan, then you can get a better deal,” Ma said. Bank of China Ltd., Industrial & Commercial Bank of China (601398) Ltd. and China Construction Bank Corp. (939) were among the lenders to the facility, he said.
Ponte 16 is an integrated casino-entertainment resort over 2.3 hectares (23,000 square meters) in Macau, the world’s biggest gambling center. Once finished, it will include a luxury hotel, restaurants, a multilevel casino, a retail complex and waterfront promenade, according to Ponte 16’s website.
About HK$500 million of the borrowing will refinance a previous facility signed in 2007 while HK$700 million will be used to help build a new arcade at Ponte 16. Some of the remainder will be used for working capital and the repayment of shareholder loans, Ma said.
The new loans were marketed to other lenders in syndication and the Macau branch of ICBC was the arranging bank. The borrowing entity is Pier 16-Property Development Ltd., jointly owned by Success Universe and SJM, according to Ma, who is also deputy chief executive officer of Pier 16-Property Development. The loan is guaranteed at a ratio of 51 percent by SJM and 49 percent by Success Universe, he said.
The development of the new arcade at Ponte 16 is expected to be completed by 2014 and will include an increase of about 20 gaming tables, according to Ma.
Other banks lending to the facility include Bank of East Asia Ltd. (23), Tai Fung Bank Ltd., Wing Lung Bank Ltd., Chong Hing Bank Ltd. (1111), Banco Weng Hang SA, Banco Comercial Portugues SA and First Commercial Bank Co., according to an e-mailed statement distributed by Citigate Dewe Rogerson on behalf of Ma.
To contact the reporter on this story: Wendy Mock in Hong Kong at email@example.com