Distressed Hong Kong builder Parkview gets private loan from PAG

[HONG KONG] Hong Kong’s Parkview Group has obtained a HK$300 million (S$50 million) private credit loan from investment firm PAG, according to a source familiar with the matter, as banks grow reluctant to extend funds to the cash-strapped developer.

The bridge loan carries a nine-month tenor and offers a yield in the low-to-mid-teens, sources familiar with the matter said, asking not to be identified discussing private matters. PAG’s funding could be a relief for the company as it struggles to refinance its existing bank borrowings, they said.

Several existing lenders of Parkview, including Nanyang Commercial Bank and other Hong Kong and mainland Chinese banks, have been looking to reduce their exposure to the developer, the sources added.

Since late last year, the company has been in talks for private credit funding of at least HK$2.8 billion, offering two residential towers, parking spaces at one of its developments and others as collateral. But it’s unclear if any of the mentioned assets, which include the apartment complex Hong Kong Parkview, were offered as security in PAG’s loan.

PAG declined to comment, while Parkview did not respond to a request to comment.

The deal highlights the broader troubles facing Hong Kong’s property market. The city has been grappling with a sluggish economy and a shift in demographics that have weighed on home prices, which declined by about 28 per cent from their peak in 2021, according to data from Centaline Property Agency.

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Hong Kong’s Parkview avoids loan default, plans mall refinancing

But Parkview’s challenges extend beyond Hong Kong. In March, the company avoided a technical default on a US$940 million loan backed by a Beijing shopping mall complex. It is still in talks with banks to refinance the borrowing, which is set to mature in August, according to other sources familiar with the matter. BLOOMBERG