(Yicai Global) Sept. 19 -- Guangzhou R&F Properties Co. [HKG:2777] is currently seeking a secured loan of USD1.8 billion (CNY11.9 billion) from Chinese lenders. The loan will be used to pay for the acquisition of Dalian Wanda Group Co.'s hotel assets.
The period of the proposed loan is seven years, Cailian Press reported today, adding that the loan might be secured against the acquisition's target assets.
R&F Properties bought 77 hotels from Wanda group for CNY19.9 billion in July. It agreed to make the initial payment of CNY10 billion in the following three months, and pay off the remaining CNY9.9 billion prior to Jan. 31, 2018, per the acquisition announcement.
All the hotels are located at prime urban locations, and are jointly operated with leading global hotel management companies, according to the announcement.
However, international rating agency Fitch placed the Chinese real estate developer's BB bond rating on Rating Watch Negative (RWN) shortly after the acquisition, on grounds that the deal has pushed up the company's overall debt level, resulting in increased leverage, as measured by net debt/adjusted inventory, above Fitch's 60 percent threshold.