China developers Logan and KWG secure refinancing for US$1 billion debt facility

CHINESE distressed developers Logan Group and KWG Group Holdings have secured a private loan to refinance a facility of over US$1 billion that’s backed by luxury real estate in Hong Kong, according to sources familiar with the matter.

The borrowing, arranged by JPMorgan Chase, was signed late Saturday (Aug 10) evening, according to the sources who asked not to be named discussing private matters. The luxury real estate project behind the facility is The Corniche and the original HK$10.2 billion (S$1.7 billion) loan was set to mature on Aug 25, according to data compiled by Bloomberg.

Private equity and credit firms Davidson Kempner Capital Management and Dignari Capital Partners HK provided US$250 million each. Financial firms RRJ Capital and Deutsche Bank each lent US$200 million and Pacific Investment Management provided US$150 million.

RRJ and Deutsche declined to comment, while Pimco said it does not comment on individual deals. Dignari, Davidson Kempner, Logan and KWG did not respond to requests for comment outside of normal business hours.

The refinancing plan will pave a path forward for Logan to restructure its US$8 billion of offshore debt. While The Corniche is not included in Logan’s restructuring, it’s been at the centre of negotiations as the ability to secure refinancing for it is viewed as a bellwether for how viable the developer’s debt plan is likely to be.

The loan size of the new borrowing facility was US$1.05 billion, smaller than the original US$1.3 billion after both developers paid down some outstanding debt, according to one of the sources familiar. The private loan has a 13 per cent annualised yield with a tenor of 30 months and two six-month extension options, the sources said. BLOOMBERG