Fortune Real Estate Investment Trust, the Singapore-listed vehicle that invests in Hong Kong property, closed its HK$2.39 billion ($306.8 million) debut CMBS offering via the Triumph Assets SPV last week. HSBC Securities arranged the deal - collateralized by a secured loan held over 11 retail properties owned by Fortune - with DBS Bank as joint lead manager.
The notes have an expected maturity of five years and a 6.5-year legal final and should the notes not fully amortize in five years, a step-up feature is triggered. All three tranches priced at the mid-point of the marketed range. The HK$1.74 billion senior piece, rated AAA' by both Fitch Ratings and Standard & Poor's, pays a 25 basis point spread over Hibor; the HK$360 million double-A rated tranche pays 45 basis points over and the HK$290 million single-A rated notes carry a 60 basis point spread to Hibor, respectively. Should the five-year step-up trigger be activated, spreads to Hibor double for all three tranches.
Sources reported that more than 12 investors participated in the deal, most of which, was placed with banks, with additional interest from government agencies, insurance companies and asset managers. 80% went to Hong Kong accounts and 20% to Singapore institutions.
"With a number of REITs rumored to be lined up for listing, this transaction bodes very well for the CMBS market in Hong Kong," the source said.
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