[Asia Economy Reporter Lim Jeong-su] Project financing (PF) worth 126.5 billion KRW has been secured for the residential-commercial complex development within the MTV Geobukseom development project in Siheung-si, Gyeonggi-do.
According to the investment banking (IB) industry on the 4th, Daehan C&D Co., Ltd., the developer of the Geobukseom residential-commercial complex, received a PF loan of 116.5 billion KRW under the lead management of Korea Investment & Securities. The loan has a maturity of 6 months with a lump-sum principal repayment at maturity.
The loan was divided into senior tranche (Tranche A) of 116.5 billion KRW and subordinated tranche (Tranche B) of 10 billion KRW according to repayment and collateral priority. Senior loans have higher repayment stability compared to subordinated loans, but the interest rate investors receive is lower than that of subordinated loans.
The raised funds will be used for the residential-commercial complex development project in the 1BL (block) area of MTV Geobukseom, Siheung-si, Gyeonggi-do. Daewon C&D plans to build 402 apartment units and 594 officetel units ranging from 2 basement floors to 35 above-ground floors on this site.
Korea Investment & Securities provided credit support to a special purpose company (SPC) created for securitization during the PF loan securitization process. If the SPC lacks funds to repay securitized bonds, it has agreed to underwrite privately placed bonds issued by the SPC.
An IB industry official stated, "The Geobukseom development project is planned to include not only residential-commercial complexes but also apartments, offices, and leisure towns, and related PF financing for the development project is ongoing."
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