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1. Henderson , Sino Land seek total $9b in loans

1. Henderson , Sino Land seek total $9b in loans
Wong Ka-chun, The Standard 31 May 2005

Anticipating a rising trend in interest rates, Henderson Land Development and Sino Land, two of the territory's largest developers, hope to tap the syndicated loan market for at least HK$9 billion combined, bankers familiar with their plans said.

Henderson Land, the third-largest developer by market value, is seeking a five-year term loan of HK$6 billion to HK$6.5 billion to refinance a HK$5 billion loan signed in 2001 and fund its HK$1.3 billion bid to privatize mainland property unit Henderson China Holdings. ``The developer is asking a group of banks for a loan facility of HK$5 billion initially, but it would not be difficult to increase that to at least HK$6 billion since several of the banks involved have a long relationship with Henderson,'' said a banker who has already submitted a proposal.

Another source said Henderson Land has verbally asked eight to 10 banks to submit proposals with underwriting commitments of at least HK$700 million each. Both HSBC and Bank of China, the two largest local lenders, are believed to be part of the group. Bankers said Henderson would likely have to pay interest of 30 to 32 basis points over the Hong Kong interbank offered rate, similar to the 30 basis-point premium that Cheung Kong (Holdings) paid for its HK$4 billion five-year term loan early this month.

``It seems that for borrowers with good credit, pricing will be around the same level as Cheung Kong's deal,'' according to a senior banker in the syndicated loan market.

Henderson Land secured a HK$10 billion syndicated loan, divided into five- and seven-year tranches, from 23 banks in September, last year's largest syndicated deal in Hong Kong.