Henderson pair in 'club deal' facility

PUBLISHED : Tuesday, 19 July, 1994, 12:00am
UPDATED : Tuesday, 19 July, 1994, 12:00am

HENDERSON Land Funding and Henderson Investment Funding entered into an agreement yesterday for a five-year $1.56 billion unsecured medium-term facility with 11 banks.

They are the subsidiaries of Henderson Land Development and Henderson Investment.

This syndicated facility was arranged on a ''club deal'' basis and was met with positive market reception, with the final loan amount exceeding the set target.

Club deals are transactions between the borrower and a handful of banks on a one-to-one basis. No public underwriting is needed for the syndication.

The proceeds of the first syndicated loan raised by the group this year will be used for general working capital.

It carries an interest margin of 70 basis points over Hong Kong interbank offered rate (HIBOR) for the first two years and 82.5 basis points for the last three years.

Last year, the company launched two issues of Euro-convertible bonds amounting to $5.9 billion.

Going back to the traditional bank syndication market this year is largely seen as a move to avoid paying a premium for the high volatility in the debt market.

Societe Generale was appointed to act as the agent of the facility.

Other lenders included Sanwa Bank, Bank of Tokyo, Dai-Ichi Kangyo Bank, Fuji Bank, Mitsubishi Bank, Sakura Bank, Sumitomo Bank, ABN-AMRO Bank, Westdeutsche Landesbank Girozentrale and Mitsubishi Trust and Banking.

The company is the first to cut prices on its flats after the government's cooling measures. It has reduced prices on the last two phases of its Sunshine City development in Ma On Shan.

It is also rumoured that the developer is considering to securitise its mortgage portfolio in a bid to offload the long-term commitments and generate funding for future developments.

Last year, Henderson became the first developer to join forces with banks to provide extra financing to home-buyers.