Central office tower loan may balloon as lead investor ditches sale

After China Energy withdrew, the $16.08b loan pricing rose 10bps.

Bloomberg reports that yield may rise as the lead buyer pulled out of the $16.08b loan to acquire what may be Hong Kong’s costliest office tower.

China Energy Reserve & Chemicals Group earlier pulled out of the buying group to acquire billionaire Li Ka-Shing’s The Centre amidst a crackdown by Chinese authorities on high-value overseas investments. The gap, however, was quickly filled by Hui Wing Mau, chairman of developer Shimao Property Holdings Ltd., and Pollyanna Chu Yuet Wah, co-founder of Kingston Financial Group Ltd. who took 20% and 17% stake respectively.

The latest negotiations on the interest margin of the one-year senior bridge loan has been increased by 10 basis points to 140 basis points over Hibor from 130 basis points, translating to a new all-in of 190 basis points from 180 basis points, sources told Bloomberg.

Here’s more from Bloomberg:

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