Chinese companies have on average paid higher margins for offshore syndicated loans so far this year amid the COVID-19 crisis, after enjoying at least six consecutive years of price compression. However, margins on loans for Hong Kong corporates have remained largely unchanged from 2019.

The average margin on USD and HKDsyndicated loans for Chinese names was 213.71bps so far this year, up from200.07bps in 2019, after declining for at least six years since 2013 when it was 274.77bps.

Some companies are offering higher margins for their deals launched between end-April and May than what they paid for their previous loans. Property developer GreenlandHolding Group via its subsidiary Gluon Xima International is in the market with a USD250m three-year loan offering Libor+ 260bps, which is 35bpshigher than what it paid for its USD 315m three-year loan signed in 2017. Lead-acid battery manufacturer LeochInternational Technology launched a USD100m three-year facility offering a 20bps-higher margin than what it paid on its previous USD 200m facility of the same tenor in 2017.

The average pricing for Hong Kong companies’ loans was at 144.59bps in 2020-to-date, compared with 145.18bps in2019. Conglomerate Chow Tai FookEnterprises is tapping the market with an HKD5.8bn-equivalent five-year loan with pricing closely mirroring its HKD 6bn-equivalent five-year facility closed in April last year. It offers the same margin of Libor/Hibor+ 120bps, but a slightly higher top-level upfront fee of 135bps, which translates to atop-level all-in of L/H+ 150.68bps, compared with the 132bps upfront fee and L+150bps top-level all-in on its 2019 loan.

Jason Huang-Jones APAC Data Manager Debtwire