CapitaLand-Led Group Lands $2b Property Loan

Source : The Business Times, April 12, 2008

Biggest ever loan syndicated in S'pore will be applied towards Farrer Court project

THE largest syndicated residential property development loan ever arranged in Singapore - a huge $1.996 billion - has been issued to the CapitaLand-led consortium that clinched Farrer Court.

The five-year facilities have been fully underwritten by DBS Bank, UOB Asia, Standard Chartered Bank, OCBC and Royal Bank of Scotland.

The proceeds will be used to refinance the acquisition cost of the site and to partly finance the development and construction of a new condo on it.

CapitaLand has a 35 per cent stake in Morganite Pte Ltd, a joint-venture vehicle it set up with Hotel Properties Ltd (HPL), Morgan Stanley Real Estate Special Situations Funds III and Wachovia Development Corporation to acquire Farrer Court for $1.3388 billion - the biggest-ever collective sale in Singapore.

HPL and Morgan Stanley each own 22.5 per cent of Morganite, while Wachovia holds the remaining 20 per cent.

Farrer Court's acquisition was completed on March 10. The consortium plans to build a 36-storey condo designed by Pritzker Architecture Prize winner Zaha Hadid.

The 99-year leasehold project, with about 1,500 units, is expected to be launched next year.

The facility agreement for nearly $2 billion comprises a secured term loan for the land, a revolving credit facility that will be progressively drawn down for the project's construction and bank guarantees.

Stanchart managing director (syndications-origination) Harrison Ong said that the facility agreement has a five-year tenure. When asked about interest rate, he would only say: 'It is reasonable, given the strength of the sponsors, the size of the facility and the location of the project.'

The facilities will be secured by, among other things, a mortgage over the Farrer Court site and a debenture over the assets of Morganite.

In addition, the sponsors - the four shareholders of Morganite - will provide certain project and facility undertakings.