Citic Pacific has mandated six banks as coordinating arrangers for a HK$2.4 billion revolving credit/term loan facility. The arranger group comprising of Bank of China, Bank of Communications, Bank of Tokyo-Mitsubishi, BNP Paribas, Commerz (East Asia) and ICBC (Asia) will fully underwrite the facility, which will be launched into general syndication on July 18. Bank of China is the publicity agent for the transaction.
The unsecured facility comprises of two tranches with bullet repayments: a revolving credit tranche of five-and-a-half years for HK$1.56 billion (Tranche A) and a term loan of seven years for HK$840 million (Tranche B). Tranche A pays a margin of 45bp over Hibor while tranche B pays 51bp over Hibor. Proceeds from the facility will go toward general corporate funding requirements.
The pricing for the current transaction is close to Citic Pacific's HK$3.8 billion facility arranged last year in May 2001. That transaction was also a combination of a revolving and a term loan comprising of two tranches. According to figures supplied by Dealogic the five-and-a-half year tranche for HK$2.66 billion paid a margin of 48bp over Hibor, while the seven-year tranche for HK$1.14 billion paid a spread of 56bp over Libor.
The five-year tranche paid commitment fees of 20bp for participating banks with upfront fees of 38.5bp for commitments of between HK$90-HK$120 million and 33bp for commitments of HK$50-HK$80 million. The seven-year tranche paid commitment fees of 25bp and upfront fees of 56bp and 49bp for banks committing HK$90-HK120 million and HK$50-HK$80 million respectively.
Citic Pacific is a Hong Kong listed conglomerate with interests in infrastructure, trading and distribution, property and industrial manufacturing. Citic Pacific's controlling shareholder is China International Trust and Investment Corporation (Citic). Citic Pacific's subsidiaries include Easter Harbour Crossing Co. and Western Harbour Tunnel Co., which has just closed its HK$3.5 billion dual tranche loan.
Some observers believe the coordinating arrangers are adopting a conservative strategy in launching the deal, given that six banks are leading a transaction of HK$2.4 billion. This deal could also be over-subscribed in the general syndication stage.
