Mandarin signs

Clarence T'Ao is not finding August very quiet. The regional head of loan syndications for BNP Paribas has four signings in the next week - for Citic Pacific, Henderson Land and Kerry Holdings.

The first pen he will lift, however, is for Mandarin Oriental's first foray into the public loan market that most people can remember. The luxury hotel group has taken advantage of excellent borrowing conditions to refinance some privately negotiated bilateral loans and is thought to have significantly improved its pricing.

Not only that, but the Jardine-controlled group has also increased its average tenor from three years to six years.

The deal is split into two tranches - a five year revolving credit facility for HK$1.7 billion ($218 million) and seven year term loan facility for HK$1.3 billion. The pricing of the former was 60bp over Hibor, all in, and the latter was priced at 67bp over, and did not have a commitment fee.

"This is a name people like," says T'Ao of BNP. "The deal was perceived as well structured, and as having good security." The loan was oversubscribed.

BNP Paribas was one of the lead arrangers on the loan along with Bank of Tokyo Mitsubishi and Standard Chartered.

The deal sees Mandarin improving its cost of funding at a time when top Hong Kong corporates are taking advantage of highly favourable market conditions. Indeed, not only are absolute rates low, but the spreads being paid by names like Mandarin are probably half what they would have been straight after the financial crisis (see FinanceAsia Magazine, July, 'Bruised and battered').

Little wonder then that Mandarin CEO, Edward Ettedgui, should say: "The new facilities not only increase significantly the average term of our bank debt, but are also competitively priced."

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