Hong Kong property developer Chinese Estates Holdings has begun marketing a commercial mortgage-backed securitization, according to banking sources.
The HK$1.8-2 billion (US$232-258 million) transaction, arranged by SG Asia, will securitize the rental income of Windsor House, a retail and office building located in Causeway Bay, a major commercial district in Hong Kong. The three-year issue comprises three tranches and is expected to receive provisional ratings from Moody's by the end of September.
If launched, the transaction would be the first CMBS from Chinese Estates Holdings and the third to emerge from Hong Kong this year, following similar commercial property-backed issues by developers Wharf Holdings in February and Sino Land in June. Property values in Hong Kong have begun to stabilize after falling drastically over the past 18 months, making it possible that other developers will re-visit their securitization plans.