HNA Group in refinancing quandary as Hong Kong project loans loom

(Sept 14): When HNA Group Co., the Chinese conglomerate that’s been buying up companies worldwide, spent US$3.5 billion ($4.7 billion) in Hong Kong earlier this year on land for its first luxury real estate development, it had no problems getting bank funding.

But now HNA needs more: to refinance the short-term loans it used for its purchases, which start coming due in November, and then to actually build the towers that will lure high-end buyers and start generating money.

At least four out of eight banks known to have provided a combined US$1.5 billion worth of short-term financing for the land purchases to HNA’s units have decided not to renew that credit and don’t intend to extend fresh loans to fund construction costs, according to people with knowledge of the matter who asked not to be identified discussing confidential client relationships. Three of the banks haven’t yet decided and will base their decisions on the terms negotiated, according to people familiar with the discussions.

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