High liquidity in the domestic market led Hong Kong investors to snap up the debut commercial mortgage-backed securitization of local property developer Chinese Estates Holdings, said bankers at lead manager SG Asia in Hong Kong.

The HK$1.821 billion (US$234.4 million) three-year issue by Windsor House Securitisation Ltd. comprises five series of notes. Series A (HK$1.032 million) was priced at 130 basis points over three-month Hibor; series B1 (HK$150 million) and B2 (HK$199 million) were priced at 8.75% and 170 basis points over three-month Hibor, respectively; and series C1 (HK$153 million) and C2 (HK$287 million) were priced at 9.25% and 220 basis points over three-month Hibor, respectively.

Moody's has assigned prospective ratings to the three classes of triple-A, Aa2, and A3, and the size of each series may change according to requirements from the rating agency.

The entire issue was placed with a wide range of domestic banks and institutional investors. Pricing of the transaction was very tight, reflecting the lack of good quality paper and high liquidity in the domestic market.

"There is still a lot of appetite for high quality assets out there, despite it being so close to year-end," an SG banker said.

The issue is backed by the rental income from Windsor House, an office and retail building in Hong Kong. The proceeds will be used for funding a mortgage loan from the issuer to Chinese Estates.

Subscribe Now

Access to a full range of industry content, analysis and expert commentary.

30-Day Free Trial

No credit card required. Access coverage of the securitization marketplace, including breaking news updated throughout the day.