LOANS ASIA-PACIFICANDûAûûSTAKEûINû"ARAMULTIû3UKSESSARANA û
an Indonesian coal company.
RELIANCE GETS ECA-BACKED LOAN#ONGLOMERATEûRELIANCE INDUSTRIES has agreed
Aû53MûSYNDICATEDûLOANûBACKEDûBYû
Italian export credit agency Sace.
4HEûlNANCING ûWHICHûBACKSû2ELIANCESû
investment plans, will be used to facilitate
the award of contracts to Italian companies,
especially small and medium-sized
enterprises.
Sace will guarantee the loans and will
organise meetings and business events to
MATCHû2),ûWITHûPOTENTIALûSUPPLIERSûOFûGOODSû
and services in Italy.
HSBC LEDûTHEûlNANCINGûASûGLOBALû
coordinator and facility agent alongside BNP
Paribas, DZ Bank, First Abu Dhabi Bank and
MUFG as mandated lead arrangers.
-UMBAI
HEADQUARTEREDû2),ûISûACTIVEûINû
ENERGY ûPETROLEUMûRElNINGûANDûMARKETING û
petrochemicals, retail and telecoms.
INDONESIA
SIGNATURE TOWER DEAL PUT ON HOLDGRAHAMAS ADISENTOSA has placed the
CONSTRUCTIONûLOANûFORûAKARTASû3IGNATUREû
Tower on hold.
Industrial & Commercial Bank of Chinaûnû
the mandated lead arranger, bookrunner
ANDûUNDERWRITERûOFûTHEûBORROWINGûnûISûSAIDû
to be seeking better collateral for the loan
ANDûSTRONGERûlNANCIALûBACKINGûFORûTHEû
developer.
"EFOREûTHEûLAUNCHûINû ûTHEûDEALûWASûAû
53BNû
YEARûLOANûTOûBEûSECUREDûBYû
the building after completion.
Since then, the terms have been changed
multiple times.
Before being put on hold, the loan had a
TENORûOFûûYEARSûANDûTWOûTRANCHESû/NEûOFû
THEûPORTIONSûHADûANû
YEARûPUTûOPTION û
while the other had no put option.
#HINAû%XPORTûû#REDITû)NSURANCE ûORû
3INOSURE ûWASûGUARANTEEINGûTHEûlNANCINGû
FORûTHEûFULLûûYEARS
'RAHAMASûCONTRACTEDû#HINAû3TATEû
#ONSTRUCTIONû%NGINEERINGû#ORPûTOûBUILDûTHEû
TOWER ûAû
STOREYûSKYSCRAPERûWITHûOFlCES û
HOTELSûANDûSHOPSûINûAKARTASû3UDIRMANû
central business district.
JAPAN
AEON REIT SIGNS ¥27bn REFIAEON REIT INVESTMENTûHASûSIGNEDûAûcBNû
53M ûBULLETûTERMûLOANûFORûRElNANCINGû
purposes.
4HEûLOANûCOMPRISESûAûcBNûONE
YEARûTRANCHE û
AûcBNûTHREE
YEARûTRANCHE ûAûcBNûlVE
YEARû
TRANCHE ûAûcMûlVE
YEARûTRANCHEûANDûAûcBNû
seven-year tranche. The portions pay an interest
margin of 22bp over one-month Tibor, a margin
of 22bp over three-month Tibor, a margin of
BPûOVERûTHREE
MONTHû4IBOR ûAûûlXEDû
ANNUALûINTERESTûRATEûANDûAûMARGINûOFûBPûOVERû
three-month Tibor, respectively.Mizuho Bank, SMBC and Sumitomo Mitsui
Trust Bank were the arrangers. Aeon Bank,
Gunma Bank, Hiroshima Bank, Hyakugo Bank,
Mizuho Trust & Banking, MUFG, Norinchukin
Bank, Resona Bank, 77 Bank and Yamaguchi Bank
joined in syndication.
Drawdown is slated for October 22.
The borrower, which invests in shopping
malls, last tapped the syndicated loanRising Hibor pressures lenders
HONG KONG Interbank rates have doubled since MarchHigher Hong Kong interbank rates are curbing
banks’ appetite to lend and boosting interest
margins on Hong Kong dollar loans amid fears of
a potential liquidity crunch.
The three-month Hong Kong interbank offered
rate (Hibor) surged to a 10-year high of 2.28% in
late September, more than double the 1.02% in
March, after the central bank raised its base rate
and Hong Kong commercial banks raised their
prime rates for the first time in 12 years.
The jump in wholesale funding costs is likely to
translate to higher spreads, easing pricing pressure
that has come with rich liquidity and a slowdown in
Asian syndicated lending in recent years.
Lenders with higher funding costs are looking
for higher-yielding loans and fatter fees to hit
target return levels, and pricing on Hong-Kong
dollar denominated loans is rising.
“The market has been extremely borrower-
friendly over the past few years,” a Hong
Kong-based loan banker said. “With the rise of
the Hibor and Libor rates, and interest rates in
general, there is a very preliminary view that this
sentiment will soon change.”
The difference between three-month Hibor
and Libor narrowed to 11.5bp on October 1
from 117bp on April 12 after almost a decade of
comparatively low volatility.
The narrowing gap between the two interbank
rates has already been reflected in new deals,
which have different pricing for each benchmark
with higher rates for Hibor tranches.
A two-year loan for CMBC CAPITAL HOLDINGS of
up to HK$1.4bn (US$178m), which is available in
either Hong Kong or US dollars, offers interest
margins of 155bp over Hibor and 150bp over Libor.
“The spread for Hibor is 5bp higher than that
for Libor as the lead bank has already taken
the narrowing gap between Libor and Hibor
into account,” a second Hong Kong-based loan
banker said.
“It makes more sense as Hibor is lagging
behind US dollar yields and tighter Hong Kong
dollar liquidity is triggering expectations for
higher prime rates in Hong Kong, which is in turn
pushing Hibor up further.”
HSBC, Hang Seng Bank and Bank of China
(Hong Kong) all raised their prime lending ratesto 5.125% from 5% on September 27. Standard
Chartered raised its rate to 5.375% from 5.25%.TIMES CHANGE
Before the rate hikes, Hong Kong dollar-
denominated loans in the first six months of
2018 totalled HK$141bn (US$18.0bn), more than
double HK$67bn for the same period last year,
according to LPC data.
That jump in local currency borrowing was due
to lower Hibor rates than Libor rates.
In January, mobile terminal antenna
manufacturer SHENZHEN SUNWAY COMMUNICATION
launched a US$200m three-year debut offshore
loan. However, the borrower decided to switch
to Hong Kong dollars in early March to reduce
borrowing costs.
The three-month Libor rate increased from
178bp on January 31 to 202bp on March 1, while
the Hibor rate dropped from 122bp to 108bp in
the same period.
As a result, mandated lead arranger and
bookrunner Citigroup closed the deal after
attracting 11 banks into the financing.
Although lenders have been searching for
better returns, companies have been cautious
about stepping up Hong Kong borrowing due to
the rate volatility.
The volume of Hong Kong dollar-denominated
loans could fall in the coming months as a result.
Deal flow in the third quarter of 2018 was already
65% lower at HK$19bn compared with the same
period a year earlier.
“Companies borrowing in Hong Kong have
been spoiled by the super-low interest rate
environment, and they are very cost-conscious
about the interest portion of their debt,” a third
Hong Kong-based loan banker said.
Other lenders are more optimistic about the
outlook for the Hong Kong market.
“Syndicated loan volume for the next six to
12 months will not be heavily affected by the
rising Hibor as Hibor is still very cheap
compared with Libor, and Libor is likely to go
higher if the US Federal Reserve continues to
push up interest rates,” a fourth Hong Kong-based
loan banker said.
Evelynn Lin, Apple Lam