Costlier loan for deal to buy HK’s most expensive tower

HONG KONG • The lead buyer has walked and now lenders are toughening their terms in a deal to buy Hong Kong’s most expensive office tower.

A senior bridge loan may see its yield rise as buyers and banks negotiate the HK$16.08 billion (RM8.23 billion) package to finance the purchase of the building known as “The Center” from a company owned by billionaire Li Ka-Shing, according to people familiar with the matter. Last month, Bloomberg News reported that China Energy Reserve & Chemicals Group pulled out of the buyer group.

The latest negotiations on the interest margin of the HK$16.08 billion 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, said the people, who asked not to be identified because the information hasn’t been publicly disclosed.

China Energy emerged as a surprise leader of a buyer consortium in November that’s seeking to buy CK Asset Holdings’ office building for HK$40.2 billion, Bloomberg News reported last month, citing people familiar with the matter.

China Energy was to have taken a 55% stake in the purchaser, CHMT Peaceful Development Asia Property Ltd. Hui Wing Mau, chairman of developer Shimao Property Holdings Ltd, and Pollyanna Chu Yuet Wah, the billionaire co-founder of Kingston Financial Group Ltd, joined the consortium as new sponsors. — Bloomberg