A-list Hong Kong property firms make a dash for cheap loans

Hong Kong's A-list property names are making a dash before the year-end for fundraising in the loan market, taking advantage of a recent downward trend in pricing.

Property giants have been frequenting the bond market over the past year as bond pricing proved more attractive than for loans. However, as bond pricing rises, many are returning to the loan market.

Hang Lung Properties, for example, paid a 2.95 per cent coupon on a seven-year bond issue in June, and this month had to pay 3.65 per cent on a 4½-year issue.

IFC Development, Sino Land and Sun Hung Kai Properties are the latest names to have surfaced in the loan market, and are in talks for deals.

They follow closely on the heels of recent financings launched for property giants Henderson Land Development, Cheung Kong's indirectly owned Fortune Real Estate Investment Trust and Wheelock Properties.

Pricing for top-tier corporates have dropped drastically from last year. SHKP set the tone at the beginning of this year with a 158 basis points all-in on a five-year loan, compared to a 176-point all-in on a three-year paper for IFC early last year.