Bank of China (Hong Kong) contributes to a £600 million GBP syndicated loan for the 20 Fenchurch Street 2020 Refinancing Project

Project narrative

On January 27, 2020, a two-bank syndicate — the Bank of China (Hong Kong) Limited (BOCHK) and The Hongkong and Shanghai Banking Corporation (HSBC) — signed a £600,000,000 GBP term loan facility agreement with 20 Fenchurch Street Limited Partnership — an England and Wales-incorporated special purpose vehicle (SPV) jointly owned by Jersey-incorporated Foxland Investments Limited (49.995% stake), Jersey-incorporated Foxland FS Unit Trust (49.995% stake), and 20 Fenchurch Street (GP) Limited, an England and Wales-incorporated company that served as general partner of 20 Fenchurch Street (GP) Limited and is wholly-owned by Foxland Investments Limited (0.01% stake), with all of these entities ultimately being subsidiaries of Hong Kong-incorporated LKK Health Products Group Limited, which is subsidiary of Hong Kong-incorporated and based food company LKK Group Limited — for the 20 Fenchurch Street 2020 Refinancing Project. This loan carried a maturity period of five years from drawdown and an interest rate of LIBOR plus a margin of 0.85%. This loan had amortization of £30,000,000 GBP per annum with the remainder due in one installment on the termination date. The loan included financial covenants for a historic interest cover of at all times at least 150% and a loan-to-value ratio not exceeding 55%. BOCHK and HSBC served as arrangers while HSBC served as agent and security agent. This loan was secured by (i.e. collateralized against) a first floating charge on all its rights, claims, title, and interest in and to an account and its proceeds and a first ranking priority on all its rights, claims, title, and interest in an account and its proceeds, as charged by 20 Fenchurch Street (GP) Limited in its own capacity and its capacity as general partner of 20 Fenchurch Street Limited Partnership in a security over cash agreement in favor of HSBC dated February 11, 2020 and governed by Hong Kong law. This loan was also secured by a first legal mortgage on freehold land and buildings at 20 Fenchurch Street, London EC3M 3BY (title number AGL240173) as charged by 20 Fenchurch Street (GP) Limited, leasehold land and buildings at 20 Fenchurch Street, London EC3M 3BY (title number AGL244138) as charged by 20 Fenchurch Street (GP) Limited, leasehold land and buildings at 20 Fenchurch Street, London EC3M 3BY (title number NGL890389) as charged by 20 Fenchurch Street (GP) Limited, sub-leasehold land and buildings at 20 Fenchurch Street, London EC3M 3BY (title number AGL240376) as charged by 20 Fenchurch Street (GP) Limited, freehold land and buildings at 20 Fenchurch Street, London EC3M 3BY (title number AGL342083) as charged by 20 Fenchurch Street Nominee No. 1 Limited and 20 Fenchurch Street Nominee No. 2 Limited, and freehold land and buildings at 20 Fenchurch Street, London EC3M 3BY as charged by 20 Fenchurch Street Nominee No. 1 Limited and 20 Fenchurch Street Nominee No. 2 Limited, a first fixed charge on all its rights, title, and interest in the real property and all related rights, a first fixed charge of all its rights, title, and interest in the all issued shares (1 ordinary share of £1.00 GBP each) in 20 Fenchurch Street Nominee No. 1 Limited and 20 Fenchurch Street Nominee No. 2 Limited as charged by 20 Fenchurch Street (GP) Limited and a general partnership interest in 20 Fenchurch Street Limited Partnership as charged by 20 Fenchurch Street (GP) Limited and all dividends, distributions, interests, and other moneys payable in respect of those interests, a first fixed charge on all its rights, title, and interest to all plant, machinery, office equipment, computers, vehicles, furniture, fittings, and other chattels and all related rights, a first fixed charge on all its rights, title, and interest to and each account, any amount standing to the credit of the accounts, and the debt represented by it and all related rights, a first fixed charge on all its rights, title, and interest to each of the accounts with any bank, building society, financial institution, or other person and the debt represented by it and all related rights, an absolute assignment of all its rights, title, and interest to any rental income and any guarantee of rental income in any lease document and related rights, an absolute assignment of all its rights, title, and interest to all indebtedness and related rights, a first fixed charge on all its rights, title, and interest to all indebtedness and all book and other debts and monetary claims and their related rights, an absolute assignment of all its rights, title, and interest in and to all of its rights under any contract or policy of insurance taken out by it or on its behalf or which it had an interest in and all related rights, a first fixed charge on insurance rights and all related rights, an absolute assignment of all its rights, title, and interest to any hedging agreement and related rights, an absolute assignment of all its rights, title, and interest to any lease document and related rights, an absolute assignment of all its rights, title, and interest in and to each relevant contract and all related rights, a first fixed charge of all its rights, title, and interest to any agreements, contracts, deeds, leases, licenses, undertakings, guarantees, covenants, warranties, representations, and other documents entered into it, given to, or benefiting it in relation to the real property and related rights, a first fixed charge of all its rights, title, and interest to all patents, trademarks, service marks, designs, business and trade names, copyrights, design rights, moral rights, inventions, confidential information, know-how, and other intellectual property rights and interests to which it is entitled, registered or unregistered, the benefit of all applications and its rights to use such assets and all related rights, a first fixed charge of all its rights, title, and interest and all related rights to the benefit of any authorization held in connection with its use of any security asset and right to recover and receive compensations in respect of it, goodwill, rights, and claims to its uncalled shared capital, all rights to recover any VAT on any supplies made to it relating to the security assets and any sums so recovered, and the capital and assets of the partnership and all related rights together with all present and future claims, causes of action, payments, and proceeds in respect thereof, and a first floating charge on all its present and future assets and undertaking of it, as charged by 20 Fenchurch Street (GP) Limited as general partner of 20 Fenchurch Street Limited Partnership, 20 Fenchurch Street (GP) Limited as trustee of land for 20 Fenchurch Street Limited Partnership, 20 Fenchurch Street Nominee No. 1 Limited and 20 Fenchurch Street Nominee No. 2 Limited — England and Wales-incorporated wholly-owned subsidiaries of 20 Fenchurch Street (GP) Limited — as joint trustees of land for 20 Fenchurch Street Limited Partnership, in a security agreement in favor of HSBC dated February 11, 2020. The borrower fully drew down the loan on February 14, 2020, so the final maturity date was February 15, 2025. On December 28, 2021, the lenders entered into an amended and restatement agreement with the borrower for the loan; in this amendment, the loan remained the same except that LIBOR was replaced by SONIA as the floating rate. LKK purchased 20 Fenchurch Street, also known as the 'Walkie Talkie' building, an iconic building in London, England, in 2017 for £1.3 billion GBP. As of December 31, 2023, the building's value had fallen to £901 million GBP (€1.06 billion EUR). In August 2024, Real Estate Capital Europe noted that the fact that the £600 million GBP loan had not yet been refinanced and was due in February 2025 with an outstanding balance of £487 million GBP. There was material uncertainty that could lead to LKK having to pay off the loan.