Hong Kong Housing Society secures US$1.5 billion syndicated loan

THE Hong Kong Housing Society (HKHS), a major public housing provider of the city, has signed a US$1.5 billion syndicated loan with 12 local and international banks, the non-governmental organisation said in a statement on Thursday (Sep 12). 

The largest deal of its kind for the organisation, the five-year term and revolving loan facilities include a HK$3 billion (S$501.9 million) social tranche, HKHS said. The loan’s overall pricing is 86 basis points over the Hong Kong Interbank Offered Rate, a local lending benchmark.

The signing of the borrowing facilities, which HKHS said will be particularly used for subsidised housing projects, underscores the rising funding needs of developers amid a worsening property slump in the Asian financial hub. Hong Kong’s public sector is facing growing financial strain, as the housing downturn has choked off one of the city’s most important sources of revenue.  

Lenders of the loan include Bank of China (Hong Kong, Industrial and Commercial Bank of China (Asia), The HongKong and Shanghai Banking Corp, Oversea-Chinese Banking Corp, DBS Bank, Bank of Communications Hong Kong Branch, Standard Chartered Bank (Hong Kong) and Sumitomo Mitsui Banking Corp, among others, according to the statement.

HKHS said it is now planning or building more than 20 projects, with over 17,000 subsidised housing units expected to be completed within the next five years. BLOOMBERG