SEO Version
FORTERRA
ANNUAL REPORT 2013
NOTES TO THE
FINANCIAL STATEMENTS
103
10
INTEREST-BEARING BORROWINGS (CONTINUED)
The bank loans are secured by legal mortgages over each specific property excluding 3
development sites of Central Park Mall (collectively, the “Mortgaged Properties”) and a pledge
of the equity interest in the property companies which hold The Place and Forterra House. The
equity interest in the property company of Huai Hai Mall is also required to be pledged using
best efforts with the applicable authority. As at 31 December 2013, application in conjunction with
the banks for the equity interest pledge of the property company which holds Huai Hai Mall is in
progress. The term loan facilities have legal covenants which require the Group, amongst others:
(i)
not to, without the prior written consent of the lender, cause, suffer or permit to exist or
to be created, incurred or assume any lien on any portion of the Mortgaged Properties;
(ii) to conform to various negative pledge covenants which impose certain restrictions on
dividend payment by some entities in the Group;
(iii) to maintain loan to valuation (“LTV”) ratio in respect of the Mortgaged Properties as follows:
•
The Place Existing: LTV shall not exceed 50%
•
The Place Extension: LTV shall not exceed 60%
•
Forterra House: LTV shall not exceed 60%
•
Huai Hai Mall: LTV shall not exceed 55%
To minimise the Group’s exposure to adverse interest rate movements on its US$ denominated
floating rate loans, the Group has entered into the following hedging arrangement:
•
Interest rate swap for the notional principal amount of US$135.0 million on a bank loan for
The Place, effective from 26 January 2012 to 27 January 2014.
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