China CITIC Bank contributes to GBP 430 million loan to R&F Properties and C C Land to cover remaining costs of Nine Elms development

Project narrative

On September 27, 2021, China CITIC Bank contributed to a GBP 430 million syndicated loan to R&F Properties and C C Land, two Chinese property development corporations, to finance the remaining costs on their development efforts concerning the Nine Elms development project in One Thames City, London, involving the construction of 600 new apartments across 3 high end residential towers. The loan, which began syndication as early as March 23, 2021, was denominated in both British Pound Sterling and US Dollars, had a maturity of four (4) years and an average life of three (3) years, and held an interest rate of 3.25% (325bps) over contemporary USD or GBP LIBOR based on the denominations of each specific disbursement. A syndicate of lenders contributed to the loan, but only two (2) are currently known. China CITIC Bank and Lloyds Bank both acted as bookrunners and mandated lead arrangers (MLAs). Banks could commit at four (4) levels of funding: Commitments of GBP 75 million and above earned fees of 105bps for 360bps all-in, of between GBP 40-74 million earned fees of 90bps for 355bps all-in, of GBP 25-39 million earned fees of 75bps for 350bps all-in, and of below GBP 25 million earned 60bps for 345bps all-in. At the time the loan was disbursed, R&F Properties and C C Land were experiencing financial difficulties related to the Nine Elms development project. Development had run into multiple delays. Sales and rentals of developed units, which were marketed as high-end luxury apartments, were low, and R&F Properties had been selling projects in the area at a loss. In addition, the rising debt level of R&F Properties was becoming a serious concern, especially as the failure of Evergrande, having missed a bond repayment, sparked fears of a general recession in the Chinese real estate market. Despite these concerns, the borrowers were able to secure this loan and restated their confidence in the project's viability.