Oxley keeps lenders busy
Loans Developer’s fourth financing of 2018 comes ahead of looming sector slowdownBY CHIEN MI WONGSingaporean developer OXLEY
HOLDINGS is raising S$317m
(US$230m) in its fourth loan
market outing this year, at a
time when measures aimed at
curbing skyrocketing property
prices in the Lion City are
expected to result in fewer real
estate financings.
HSBC and Maybank are
arranging the 4.5-year
loan, which will fund the
redevelopment of private
residential estate Mayfair
Gardens, joining a slew of other
so-called “en bloc” sales and
related financings in Singapore
in recent months.
However, en bloc sales – a
feature of Singapore’s property
market in which a group of
owners band together to sell
entire apartment buildings for
redevelopment – are expected
to slow following tightening
measures announced in early
July. That in turn will affect real
estate financings in Singapore,
loan bankers said.
“We have to be a bit more
cautious towards lending to the
real estate borrowers given thatthe measures take into account
potential reduction in buyers’
appetite because of tightening
borrowing limits,” said a loan
syndication banker in the city.
Under the new rules,
individuals face stricter
borrowing limits on their first
housing loan, while foreigners
buying property are slapped
with higher stamp duty fees
of 20%, an increase from 15%.
Singapore citizens buying their
second or subsequent homes
also have to pay the extra
stamp duty charges.
With expectations of a drop
in private home sales, the flow
of loans related to en bloc sales
is also heading for a decline.
“The year was off to a very
good start with many en bloc
sales, but the en bloc real
estate story is going to take a
hit for the rest of the year,”
said a property sector coverage
banker in Singapore. “After
the government’s cooling
measures, some sponsors have
actually been reassessing their
positions and have even pulled
en bloc deals.”
In late July developer TEE
Land decided against exercisingits option to purchase Teck
Guan Ville, a freehold plot
located at Upper East Coast
Road, in what could have been
a S$60m collective sale.REFINANCINGS CONTINUE
The anticipated slower deal
flow for the next few months
means that any current real
estate financings are likely to
attract more attention from
lenders.
Oxley itself is also in the
market with two other loans- a Deutsche Bank-led US$250m
loan for its Royal Wharf project
in London, and a loan for the
Vista Park redevelopment in
Singapore arranged by OCBC
Bank.
Besides Oxley, Avery
Strategic Investments,
the third-largest operator
of permanent workers’
dormitories in Singapore,
is also marketing a S$400m
refinancing, offering a top-
level all-in pricing of 241.67bp.
The real estate sector
has kept the till ringing for
lenders and helped prop up
loan volumes so far this year.
Oxley completed a couple of
en bloc financings, including
a S$744.6m five-year loan
in March for the S$499m
purchase of Serangoon Ville,
a former Housing and Urban
Development Co estate.
In January, a consortium
comprising Oxley, KSH
Development, Lian Beng Group
and Apricot Capital raised a
S$879m five-year deal that
financed the purchase of Rio
Casa, a privatised HUDC estate.
In March Oxley also closed a
S$483m three-year loan backing
its acquisition of a commercial
building.
Singapore’s more significant
deals so far this year include
integrated resort Marina Bay
Sands’ S$5.1bn multi-tranche
loan, which was extended by
four years, in March.
Malaysian developer IOI
Properties closed a S$1.8bn
five-year facility to refinance
a bridge loan funding its
purchase of a plot in Marina
Bay area, while OUE Hospitality
Real Estate Investment Trust
signed a S$980m senior secured
refinancing in January.
“Refinancings will always
provide a consistent flow of
deals depending on the timing
of maturing loans, but don’t
generate much returns,” said
another Singapore-based loans
banker. Korea swamped on bond return
Bonds Enthusiastic response allows bookrunners to tighten pricing twiceBY FRANCES YOONGlobal investors flocked to
the REPUBLIC OF KOREA’s US$1bn
dual-tranche bond deal last
Thursday in a sign that asset
managers are stocking up on
high-quality credits to ride out
the emerging-market turmoil.
The SEC-registered notes,
split equally between 10
and 30-year tenors, priced at
Treasuries plus 60bp and 85bp,
respectively.
The order book peaked
around US$10bn, more than
enough to allow the sovereign
to take the rare step of revisingguidance twice from the initial
starting point of Treasuries
plus 90bp and 110bp.
Despite a 30bp tightening
on the 10-year and 25bp on the
30-year, with the yield on the
latter falling below the coveted
4% target sought by many
investors, final orders still
reached US$5.7bn.
On a spread basis, the new
3.5% 2028s priced inside the
country’s 2.75% January 2027s,
which were trading at G plus
72bp. It even priced through
Temasek’s US$1.35bn 2028s,
which were spotted at G plus
68bp and are rated higher atAaa/AAA (Moody’s/S&P).
On the 3.875% 2048s,
bankers referenced South
Korea’s 4.125% 2044s, its most
recent 30-year issue, which
was trading at G plus 84bp.
The notes did well in the
aftermarket and were bid 4bp
and 10bp tighter for the 10 and
30-year tranches, respectively,
before settling at 1bp and 3bp
tighter by lunchtime in Hong
Kong.
“The safe-haven bid and
scarcity value really hit home
for global funds,” said a debt
capital markets banker from
a US firm. “The demand wasexplosive.”
The overwhelming response
highlights the thirst for
defensive, high-rated debt
from global fund and asset
managers at a time of market
volatility and uncertain
macro prospects for emerging
countries.
The easing of tensions
between US President Donald
Trump and North Korean
leader Kim Jong Un also gave
US demand a significant boost.
US investors, whose
participation in Korean
offshore deals plummeted at
the height of the North KoreaNews