Henderson Land Development Co., the Hong Kong builder controlled by tycoon Lee Shau-kee, has approached banks for a HK$5 billion ($642.5 million) five-year term loan, according to two people familiar with the matter.
Lenders committing HK$1 billion or more will receive interest and fees for a total payment of 96.5 basis points more than the Hong Kong interbank offered rate while those contributing HK$500 million up to HK$1 billion will receive a so-called all-in payment of 95 basis points, the people said.
Lending curbs in China are forcing more companies to borrow in Hong Kong, which is increasing the cost of loans as borrowers jostle for banks’ business. Henderson borrowed HK$13.25 billion for five years in June last year, after initially seeking HK$8 billion, and paid a little under 90 basis points more than Hibor, according to the people familiar with the matter and data compiled by Bloomberg. The company has HK$49.6 billion in loans maturing before the end of 2015, Bloomberg data show.
The HK$5 billion facility is also likely to be increased, the people said, without elaborating. Proceeds will be used to refinance debt and the loan is expected to be split 30 percent and 70 percent between a term and a revolver, the people said.
Banks expected to participate include Bank of Tokyo-Mitsubishi UFJ Ltd., Citigroup Inc., Credit Agricole CIB, DBS Group Holdings Ltd., HSBC Holdings Plc, Standard Chartered Plc, and Sumitomo Mitsui Financial Group Inc., the people said.
In a revolving credit facility money that’s been repaid can be borrowed again.