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SHKP signs five-year HK$20 billion syndicated credit facility

2019-03-28

SHKP Chairman and Managing Director Raymond Kwok and bank representatives at the five-year HK$20 billion syndicated loan signing ceremony
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SHKP Chairman and Managing Director Raymond Kwok and bank representatives at the five-year HK$20 billion syndicated loan signing ceremony

Sun Hung Kai Properties Limited (SHKP) today signed a five-year HK$20 billion syndicated credit facility with a consortium of 19 leading international and local financial institutions. The facility was significantly upsized from an initial amount of HK$5 billion after substantial over-subscription, a clear indicator of the banking community’s continuous strong confidence in SHKP. 

The proceeds will be used as general working capital for business development. This arrangement is in line with the Group's policy of extending the maturity profile of their loan portfolio and arranging substantial committed facilities for future development.

The facility was signed by Sun Hung Kai Properties (Financial Services) Limited and guaranteed by SHKP.  It has a 30:70 split between term loans and revolving credit tranches with a maturity of five years. It pays an interest margin of 0.75 percent per annum over HIBOR. 

SHKP Chairman and Managing Director Raymond Kwok said at the signing ceremony: “This facility has gained strong support from the banking community, a reflection of their confidence in SHKP’s future. Our Group’s business is doing well and prospects remain positive. Since the beginning of the current financial year, our total contracted property sales have exceeded HK$51 billion and we will continue to launch new projects for sale.  This includes Phase One of 18 Stubbs Road, Cullinan West III, Phase Two of Mount Regency and Phase One of the Hoi Wing Road residential project. All of these will generate strong and continuous cash flows from our development business.

“Our rental income business also continues to show healthy performance.  Total gross rental income from our property investments reached a record high of over HK$12 billion for the first half of the current financial year.  Additional rental income will be generated from new projects as well.  On the mainland, the mall at the first phase of the mega ITC in Shanghai is expected to open during the second half of this year, while Nanjing IFC will begin to generate rental contributions in about a year’s time.  By the end of 2023, our Group’s mainland property investment portfolio will expand to over 25 million square feet from about 13 million square feet currently, elevating our Group’s rental income to new heights.”  

Mr. Kwok added: “As of the end of December 2018, the Group’s gearing ratio was low at about 12%. This, together with a robust financial position and prudent financial management, has provided SHKP with a solid foundation to weather any uncertainty or challenges that may arise in the future. With a seasoned management team, strong balance sheet and a trusted brand for quality, we are confident of achieving sustainable business growth in the years ahead.”

The facility is backed by Bank of China (Hong Kong) Limited, Mizuho Bank, Ltd., Agricultural Bank of China Limited, Hong Kong Branch, The Hongkong & Shanghai Banking Corporation Limited, Ltd., Hang Seng Bank Limited, DBS Bank Ltd., Nanyang Commercial Bank, Limited, Sumitomo Mitsui Banking Corporation, BNP Paribas, Citi, MUFG Bank, Ltd., China Construction Bank (Asia) Corporation Limited, Industrial & Commercial Bank of China (Asia) Limited, Oversea-Chinese Banking Corporation Limited, Shanghai Pudong Development Bank Co., Ltd., Hong Kong Branch, Standard Chartered Bank (Hong Kong) Limited, United Overseas Bank Limited, Bank of Communications Co., Ltd. Hong Kong Branch, and Crédit Agricole Corporate and Investment Bank.

SHKP currently has an A1 rating from Moody’s, and an A+ rating from Standard & Poor’s, with a stable outlook from both.

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