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Friday, November 18, 2011

Temasek, Khazanah said to be seeking S$5b property loans

SINGAPORE Temasek Holdings Pte Ltd and Khazanah Nasional Bhd, the state-owned investment companies of Singapore and Malaysia, hired banks to arrange S$5 billion (RM12.2 billion) of property development loans, according to two people familiar with the matter.

At least nine lenders will contribute to the five-year bullet facility, which will pay a so-called all-in fee of 100 basis points over benchmark rates, one of the people said on Wednesday

Khazanah and Temasek said in June they would jointly develop US$9.8 billion of projects in southern Malaysia and Singapore. Some S$11 billion of Singapore developments will include hotels, apartments, offices and shops in 501,020 square meters of space in two main areas of the city's downtown. The RM3 billion of projects in Malaysia's Iskandar region will have homes, retail space and "wellness-related offerings," the companies said.

"The outlook for Singapore right now is looking a little soft because it's an open economy and exposed to what's going on in Europe," Euben Paracuelles, a Singapore-based economist at Nomura Holdings Inc, said in a phone interview on Wednesday. "A deeper relationship with Malaysia could result in a few extra percentage points of growth over the next five years."

Serena Khoo, a spokeswoman for Temasek, declined to comment. Mohd Asuki Abas, a Khazanah spokesman, declined to comment.

The property agreement between Khazanah and Temasek earlier this year came as Malaysia agreed to move its railway station in the city-state's central business district to a northern Singapore site close to a bridge that connects the two countries, ending a decade-old dispute over land usage.

The joint venture for the Singapore developments, M+S Pte, will be 60 per cent owned by Khazanah and 40 per cent by Temasek.

The Malaysian project will be run through a 50-50 venture.

Banks arranging the Khazanah and Temasek loans include DBS Group Holdings Ltd, HSBC Holdings plc, Oversea-Chinese Banking Corp, Malayan Banking Bhd, Bank of Tokyo-Mitsubishi UFJ Ltd, Standard Chartered plc, Sumitomo Mitsui Banking Corp and United Overseas Bank Ltd, one of the people said. Australia & New Zealand Banking Group Ltd is also joining the group, a person familiar with its plans said yesterday.

Syndicated loans in Singapore this year are the highest on record with S$33.9 billion of facilities signed since December, according to data compiled by Bloomberg. Loans totalled S$20.9 billion for the whole of 2010, according to the figures, which go back to 1999. DBS has arranged the most loans this year, followed by OCBC and HSBC.

By Business Times

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