The Hong Kong Housing Society (HKHS) has signed HK$12 billion ($1.54 billion) five-year term and revolving syndicated loan facilities with 12 local and international banks, making it HKHS’ largest ever syndicated loan; it includes a HK$3 billion social tranche.
The overall pricing of the loan facilities is based on the Hong Kong Interbank Offered Rate plus 86 basis points, according to a September 12 media release. The deal for the loan facility comes soon after Hong Kong’s Urban Renewal Authority secured a HK$12 billion bond last month amid a difficult property market in the Special Administrative Region (SAR).
HKHS is planning on building over 20 projects, with more than 17,000 subsidised housing units expected to be completed within the next five years, including subsidised sale flats, dedicated rehousing estates, rental estate redevelopment projects and elderly housing.
The HK$3 billion social tranche will be used for the redevelopment project of Ming Wah Dai Ha in Shau Kei Wan, rehousing estates at Shek Pai Wan Road in Aberdeen and Ting On Street in Kwun Tong, as well as dedicated rehousing estates at Pak Wo Road in Fanling, Hung Shui Kiu/Ha Tsuen, Site 1E1 in Kai Tak, and Kwu Tung North, among others, a statement said.
The social tranche has been certified by the Hong Kong Quality Assurance Agency, with the projects aligned with the standards of the sustainable finance framework.
The coordinators of the facility are Bank of China (Hong Kong) (BOCHK) and HSBC. The mandated lead arrangers and bookrunners were: BOCHK; Industrial and Commercial Bank of China (Asia); HSBC; OCBC; DBS Bank; Bank of Communications, Hong Kong Branch; Standard Chartered Bank (Hong Kong); and Sumitomo Mitsui Banking Corporation. The lead arrangers on the deal were: Agricultural Bank of China Hong Kong Branch; China Development Bank Hong Kong Branch; Dah Sing Bank; and Hang Seng Bank. The facility agent was BOCHK, while the ESG coordinator was HSBC.
HKHS chairman Walter Chan said in the media release, “The loan facilities will be used for bolstering the business development of HKHS, particularly the construction of subsidised housing projects. The HK$3 billion social tranche among the loan facilities will fund designated affordable housing projects for people from different walks of lives, creating long-term value for the sustainable development of the community.”
Chan contnued: “I would also like to express my appreciation to the authority’s support in amending the banking (capital) rules to designate HKHS as a ‘public sector entity’. As a self-financing non-government organisation, HKHS upholds the principle of optimising the use of resources. In the days ahead, we will make the best use of the syndicated loan facilities and continue to achieve our vision of ‘Creating Homes for Sustainable Living’, contributing to the sustainable development of Hong Kong.”
Also in the release, Kennis Chong, general manager of the institutional business department of BOCHK, said, “The facility has received overwhelming response from the banking community, demonstrating HKHS’s solid financial strength and good reputation. BOCHK will continue to provide comprehensive financial solutions in order to meet HKHS’s business needs and assist the development of its various housing projects to benefit the community.”
Sunny Poon, managing director and head of corporate banking, commercial banking, Hong Kong, HSBC, said: “This landmark transaction featuring a social loan component will support the public housing provider’s development of rehousing estates and various affordable housing projects in Hong Kong. We look forward to deepening our relationship with HKHS as it continues its mission to create homes for sustainable living.”
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