Mtc Global Group Successfully Completes Usd 480 Million Refinancing Of City Center In Shanghai
MTC Global Financial Services, today announced the successful completion and settlementof a 5 year multi currency loan facility for its Shanghai based property City Center. The property which is 100% owned by MTC Global Group, is an office and retail complex comprising approximately 150,000 sq. of income-producing commercial real estate located in the Hong Qiao district of Shanghai.
This new loan facility, which expires in June 2015, is equivalent to USD 480 million (SGD 658 million) and has been provided by Industrial and Commercial Bank of China ("IBCC") on terms that are considerably more favorable than the outgoing loan, provided by Credit Suisse, which was due for repayment in October 2010. The loan facility includes a RMB 800 million project development loan to finance 100% of the development costs (including capitalized interest) of the City Centre Extension, an 88,000 square meter retail and office complex, due for commencement in 4th Quarter of 2010. Upon completion in 2012, this development will transform the existing City Center property into a 240,000 sq. landmark project of international standard in Shanghai and underwrites the expected 100% increase in gross income over the next three years.
Mr. Shengli Zhou - Chief Executive Officer said, This new loan facility, secured during a period of intense tightening of liquidity by the Chinese Central Government, serves as a strong endorsement of our ongoing proactive asset and capital management strategy and demonstrates the confidence that financial institutions have in MTC Global Groups high quality assets and management. We are pleased to secure the commitment of ICBC, the largest Chinese bank by assets, for the City Center refinancing on such favorable terms. We believe that the transaction reaffirms MTC Global Groups strong relationship with the PRC banking sector.
This financing follows the successful refinancing of Treasury Building (100% owned by MTC Global Group), in December 2009 by CITIC Kawah Bank, part of Chinas CITIC Group, which delivers significant financial benefits to the business with provision of additional liquidity to MTC Global Group as a consequence of average cost of debt being reduced by 46% and the release of funds previously held under a charge in favor of the outgoing lender. More importantly, following the refinancing, the currency mix of MTC Global Groups debt portfolio for the stabilized assets has a higher weighting of USD (87% vs 75%) which provides MTC Global Group with the opportunity to benefit from an appreciating RMB.
City Center is of strategic importance to MTC Global Group and presents significant growth potential. As reported on 1 July 2010, MTC Global Groups real estate portfolio, which totals RMB 9.42 billion, recorded a RMB586m (6.64%) gain for the 12 months to June 2010, of which City Center contributed 62% of the portfolio valuation uplift.
The development finance portion of the loan assures the successful completion of the City Center Extension within the previously nominated time frame of mid 2012, Mr. Shengli Zhou - Chairman and Chief Executive Officer noted.
The new complex, which will be integrated into the existing property through bridge links and underground pathways, will reinforce the iconic position of City Center in the Hong Qiao area, and further define it as a major addition to the Shanghai commercial real estate sector. A dramatic and environmentally responsive built environment with Benoy Architects producing the concept design, the building will be developed as one of the very few LEED Gold Standard certified properties in Shanghai.
by: thomas wright