Hong Kong-based real estate investment manager InfraRed NF on Tuesday announced that it has provided a $92.2-million mezzanine loan to Hong Kong-listed property developer Fullsun International Holdings Group.
The financing was provided by InfraRed NF and Firewave Management Limited, an indirect wholly owned subsidiary of Singapore-listed Metro Holdings Limited.
The loan will be used by Fullsun International to fund further construction and project acquisitions from smaller developers. The property developer is an offshore listed vehicle of a large mainland Chinese developer, Fusheng Group. The loan was structured with the additional benefit of recourse to the Hong Kong-listed parent company.
According to InfraRed NF, the loan is secured against a portfolio of two ring-fenced, partially completed residential development projects in Changsha, with additional credit enhancement provided from a mature office asset in Hong Kong. The estimated gross portfolio value of the ring-fenced collateral is more than $380 million.
“Fullsun International has a strong acquisition pipeline of distressed opportunities and we look forward to continue working with them across Tier One and select Tier Two cities,” said InfraRed NF Invesments Advisers special situations head Grant Chien.
InfraRed NF has completed 10 mezzanine investments, seven of which have been repaid. The latest loan is part of its investment strategy to focus its lending activity on projects in regional hubs, benefiting from infrastructure investment, with strong economic fundamentals and sizeable population bases, it said.
“A window of opportunity has arisen for InfraRed NF from the well-publicised contraction of available credit within China. China’s deleveraging is creating an attractive investment environment for us resulting in a healthy pipeline of mezzanine and value-add deals,” said InfraRed NF Investment Advisers CEO Stuart Jackson.
InfraRed NF is a joint venture between Hong Kong-based Vervain and InfraRed Capital Partners, a global investment manager focused on infrastructure and real estate.