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Citadel Equity inks NT$4.55bn building loan

The US-based Citadel Equity Fund secured a four-year NT$4.55 billion (US$140.7 million) syndicated loan from nine domestic banks yesterday to fund its investment in a local commercial property, the Industrial Bank of Taiwan (IBT, 台灣工銀) said yesterday.

IBT, one of the nation's three industrial banks, is the loan's leading bank.

"The loan will be allocated to fund Citadel's purchase of a 15-floor commercial building in Taipei, priced at NT$5.2 billion," IBT deputy president Sabrina Wang (王莉) said after the bank held a closed-door contract-signing with Citadel's Hong Kong-based representatives Andrew Fong (方嘉榮) and Scott Cham (湛掀凱).

Wang declined to reveal the loan's benchmarked interest rate, citing confidentiality.

The loan, fully collateralized by Citadel's newly purchased commercial building, made up as much as 87 percent of the closing price because of the building's "excellent location," Wang said.

Citadel set up a Taipei-based special purpose vehicle (SPV) -- Citadel No. 5 Asset Company Ltd -- in June to close the deal, the bank's press release said.

The building is located near the intersection of Jinzhou Street and Jianguo N Road and is scheduled to be completed in March by builder Mei Fu Group (美孚建設), the press release said.

"Citadel is upbeat about the prospect of the local commercial property market, which many foreign buyers believe is relatively cheap right now," Wang said.

Foreign investors have recently geared up to tap commercial property investments, with Citi Property Investors (CPI) Asia Pacific closing two of the largest deals with price tags of NT$9.2 billion and NT$5.5 billion respectively this month.

After closing the third-largest deal by foreign buyers this year, Castle also signed a 15-year lease with Aegon Life Insurance (Taiwan) Inc (全球人壽) for the new building's rental, IBT chairman Kenneth Lo (駱錦明) said in the bank's statement.

"Castle will be immediately rewarded with an annual 5 percent return rate," Lo said.

He said the commercial property market is expected to boom after March's presidential polls.

Citadel has been keeping a low profile and no officials were available for comment yesterday.

Anonymous sources, however, said that the private equity fund has set up its sixth SPV in Taipei to handle another new commercial property deal.

Founded in 1990, the Chicago-based Citadel manages more than US$15 billion in assets with a combined return growth rate of more than 20 percent.

The firm began aggressively tapping Asian markets two years ago.

The loan's eight other creditors include Farglory Life Insurance Co (遠雄人壽), King's Town Commercial Bank (京城商銀) and Shin Kong Commercial Bank (新光銀行).
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