Jul 5, 2024
Deutsche Bank Seeks to Buy Part of $1.3 Billion Corniche Loan
, Bloomberg News
(Bloomberg) -- Deutsche Bank AG has approached several existing lenders to buy a stake in a HK$10.2 billion ($1.3 billion) project loan backing a luxury-property development in Hong Kong, according to people familiar with the matter.
The German investment bank offered around 96 to 97 cents on the dollar for a piece of the facility maturing August that financed the construction of The Corniche, said one of the people familiar who asked not to be identified as the deal is private. No transaction has taken place, the person added.
Deutsche Bank declined to comment when contacted Friday.
The developers and owners of The Corniche are distressed Chinese builders Logan Group Co. and KWG Group Holdings Ltd. The companies, which paid a record HK$16.9 billion for the site in 2017 during China’s property boom, have been scrambling to sell the luxury apartments amid a downturn in Hong Kong’s property market.
Since 2023, the project has only sold 30 out of the 295 units as of July 3, according to the development’s website. The bulk of the transactions happened after the developers cut prices on the project by as much as 40% in April.
Another buyer that has been circling the Chinese builders’ borrowing includes alternative investment manager Ares Management Corp., which offered 95 cents on the dollar in April for a majority stake in the loan, Bloomberg News reported back then. The deal hasn’t been executed and Ares is still in talks with banks, said the person. Interest on the facility has been paid and it is not in default.
A spokesperson for Ares didn’t have any immediate comment.
Separately, JPMorgan Chase & Co. is in talks to arrange a three-year loan of about HK$8.95 billion to help refinance the existing facility. The new financing could have an annual interest rate from 10% to 15%, Bloomberg News reported in May.
HSBC Holdings Plc, Standard Chartered Plc and Industrial and Commercial Bank of China (Asia) Ltd. were among the lenders of the previous three-year borrowing from 2021, according to data compiled by Bloomberg.
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