(HONG KONG, CHINA) -- Is the lending spigot at last opening all the way for international hotel owners? In Hong Kong today, the signs are evident they are.
The Hongkong and Shanghai Hotels, Limited (HSH), a hotel and property company listed on the Hong Kong Stock Exchange (00045), announced that its wholly-owned subsidiary, HSH Financial Services Limited, has signed a HK$1.225 billion (US$158 million) four-year term loan facility with a group of seven international banks.
The facility, which matures in 2013, is guaranteed by HSH. Terms and the interest rates involved were not disclosed.
The banking consortium includes Australia and New Zealand Banking Group Limited, Bank of China (Hong Kong) Limited, The Bank of Tokyo-Mitsubishi UFJ, Ltd., Calyon, HSBC, Industrial and Commercial Bank of China (Asia) Limited and Standard Chartered Bank (Hong Kong) Limited.
The original target of the Facility was to raise HK$1 billion, but with demand from banks exceeding HK$3 billion, HSH decided to increase the loan size to HK$1.225 billion with each of the lenders holding HK$175 million, according to HSH chief financial officer Neil Galloway.
The funds will be used for refinancing existing indebtedness and for general corporate purposes. The Facility is paying a credit margin of 150 basis points.
"This is the first time for several years that HSH has come to market in Hong Kong, and our financing has met with a very strong response from the bank market," says Galloway.
"We have been able to achieve all of our objectives, including stretching our maturity profile, introducing some long term funding at the corporate level and bringing some new lenders into our bank group.
"The response highlights market confidence in HSH and further strengthens our financial position to take advantage of opportunities as they arise in the current environment."
Incorporated in 1866 and listed on the Hong Kong Stock Exchange (00045), The Hongkong and Shanghai Hotels, Limited is a holding company whose subsidiaries and jointly controlled entity are engaged in the ownership and management of prestigious hotel, commercial and residential properties in key destinations in Asia and the USA.
The hotel portfolio of the Group comprises The Peninsula Hong Kong, The Peninsula New York, The Peninsula Chicago, The Peninsula Beverly Hills, The Peninsula Tokyo, The Peninsula Bangkok, The Peninsula Beijing, The Peninsula Manila, The Peninsula Shanghai (opening 2009) and Quail Lodge Resort and Golf Club in Carmel, California.
The property portfolio of the Group includes The Repulse Bay Complex, The Peak Tower and The Peak Tramways, St. John's Building, The Landmark in Ho Chi Minh City, Vietnam and the Thai Country Club in Bangkok, Thailand.