Hutchison Whampoa is planning to arrange a HK$5 billion syndicated loan to refinance its 88 per cent share of Hongkong International Terminals (HIT) - one of the year's largest Hong Kong-dollar loan facilities, banking sources close to the deal said yesterday. The mandate was awarded this week to seven arranger banks - Citibank, HSBC, BNP Paribas, ICBC (Asia), Standard Chartered Bank, Bank of China (Hong Kong) and Bayerische Landersbank. The final terms, including price and structure, are still being finalised. The deal is seen as a pure refinancing move timed to take advantage of low interest rates and not a bid to raise capital for future infrastructure projects connected to Hutchison's most profitable subsidiary. 'I don't see how [interest rates] can get any lower than they are right now,' said John Godfray, ABN Amro's head of regional conglomerate research. 'I'd refinance everything in sight, particularly if you were worried about 3G. They say they are not but they have to prepare for the worst.' The parent company has committed US$16.7 billion to finance its global third-generation (3G) mobile phone initiative. Bayerische Landersbank would act as the facility agent, while the other banks had been mandated as book-runners for the facility, the sources said. The loan, with the conglomerate acting as guarantor for HIT, is likely to have a five-year term with the funds earmarked for refinancing purposes. According to Dealogic, HIT took out a term loan of the same amount in May 2000. Hutchison Port Holdings (HPH), the company's international port investment arm, which has more than 30 facilities under its umbrella, continues to generate healthy cash flow for its parent. HIT, Hong Kong's busiest terminal operator, is projected to move about 5.2 million boxes this year, 5 per cent more than last year. An HPH source in Hong Kong would not comment on the purpose or timing of the loan, which she called 'speculation'. Hutchison is one of Hong Kong's strongest blue-chip corporates and the borrower's last syndicated loan deal was of HK$3.8 billion in July. Industry players have argued that Hutchison would pay a lower rate to take out a bank loan than it would to, say, issue bonds. Yet bank funds may not be easy to come by for high-risk projects, such as those in the telecommunications sector. The loan facility has come amid intense market speculation that Hutchison is planning to issue a US-dollar bond worth between US$1 billion and $1.5 billion. HSBC, Goldman Sachs, UBS and Merrill Lynch are said to be bidding for the mandate. Hutchison has so far raised US$3.5 billion in the debt market this year.