Macquarie Korea fund completes refinancing

The fund has completed the refinancing of its corporate credit facility through an agreement with existing lenders which lengthens the facility and reduces it in size.

The Macquarie Korea Infrastructure Fund (MKIF), a KRW1.7 trillion (€1.1 billion; $1.6 billion) infrastructure fund traded in London and South Korea, has agreed a new five-year KRW250 billion revolving corporate credit facility.

The agreement has been struck with the providers of an existing KRW500 billion facility – of which KRW140 billion had been drawn to date – which the new facility replaces. The lenders are: Shinhan Bank, NACF, Woori, Shinhan Life, LIG Life and TongYang.

As well as the size of the facility being cut in half, the interest spread has been lowered by 130 basis points from the 91-day Korean CD rate plus 400 basis points to 270 basis points. The maturity of the facility has been extended by 1.5 years from November 2014 to June 2016. While the prior facility comprised a mixture of floating rate (KRW430 billion) and fixed rate (KRW70 billion), the new facility is floating rate only.

Said Chul Hum Paik, representative director of Macquarie Shinhan Infrastructure Asset Management Co, the manager of MKIF: “Following last month's KRW250 billion bond offering, this completes the MKIF-level refinancing and we are very pleased with the overall outcome. MKIF has now been replenished with a new and more optimal debt, consisting of fixed rate bonds and revolving credit facility, that is significantly cheaper and longer than before.”

Earlier this month, MKIF completed a $230 million bond offering, proceeds from which were used to pay off some of the original corporate facility.

MKIF is almost fully invested, apart from a $60 million commitment marked for an ongoing construction project. It has invested in roads, tunnel, bridge and port concessions.