(Bloomberg) -- Distressed Chinese developer Logan Group Co. secured a $1 billion private loan for refinancing, people familiar with the matter said, a move that increases the chances for its restructuring to move forward.
The loan taken jointly with KWG Group Holdings Ltd. was arranged by JPMorgan Chase & Co. and signed late Saturday, according to the people who asked not to be named discussing private matters. The original HK$10.2 billion ($1.3 billion) facility was backed by the Hong Kong luxury real estate project, The Corniche, and was set to mature Aug. 25, according to data compiled by Bloomberg.
The newly secured refinancing will pave a path forward for Logan to restructure its $8 billion of offshore debt. While The Corniche loan isn’t included in the firm’s restructuring, it’s been at the center of negotiations as the developer’s ability to secure refinancing for the project is viewed as a bellwether for how viable its debt plan is likely to be.
Private equity and credit firms Davidson Kempner Capital Management and Dignari Capital Partners HK Ltd. provided $250 million each, according to the people. Financial firms RRJ Capital and Deutsche Bank AG each lent $200 million and Pacific Investment Management Co. provided $150 million, they said.
RRJ, Deutsche Bank and Davidson Kempner all declined to comment, while Pimco said it doesn’t discuss individual deals. Dignari, Logan and KWG didn’t reply to requests for a response.
The size of the new borrowing facility of $1.05 billion is smaller than the original $1.3 billion loan after the two developers paid down some of the outstanding debt, according to one of the people familiar. The private loan has an annualized yield of 13%, a tenor of 30 months, and two six-month extension options, the people said.
Alternative investment asset manager Ares Management Corp. placed a bid for the loan in April but but ultimately did not take part in the lending, the people said. Ares had offered to buy a majority stake in the syndicated facility at 95% of par from existing lenders, Bloomberg reported last month. Ares declined to comment when contacted by Bloomberg.
--With assistance from Dong Cao.
(Updates to add response in fifth paragraph.)
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