Hong Kong-based InfraRed NF has provided US$63.8m in mezzanine financing to Fullsun International, taking total funds lent to the China-focused developer to US$156m.
It marks InfraRed NF’s second round of financing to Fullsun after the non-bank lender provided a US$92.2m loan to the Hong Kong-listed developer in February.
Fullsun International, the offshore listed vehicle of mainland China developer Fusheng Group, will use the funding to acquire multiple projects, as part of a strategy to accelerate the firm’s growth.
The InfraRed NF consortium includes Singapore-listed Metro Holdings, Global Gate Capital, a global alternative investment manager and a Chinese financial institution.
“China’s long-term deleveraging continues to create compelling risk-adjusted returns for us in both the value-add and mezzanine space,” said InfraRed NF CEO Stuart Jackson.
“This transaction provides further evidence of our leadership position in structuring private credit in Greater China.”
The loan is secured against a portfolio of three ring-fenced projects comprising two residential mixed-use projects in Changsha and a residential project in Zhongshan, in addition to credit enhancement from an office asset in Hong Kong.
Fullsun’s existing portfolio has generated contractual sales of about US$150m since January 2019.
InfraRed NF has made 11 credit investments in Greater China worth more than US$650m to date, having exited seven of those investments.
The latest loan follows the lender’s investment strategy of concentrating its lending activity on projects in megahubs, which benefit from higher than national average GDP per capita, population growth rates, and infrastructure investment.
Fullsun’s portfolio recently grew to include Zhongshan, a city within the Greater Bay Area.
The GBA is a cluster of 11 cities, including Hong Kong, Macau and nine cities in the Pearl River Delta, that have seen major infrastructure investment over the years.
InfraRed NF is a Hong Kong-based joint venture between investment manager InfraRed Capital Partners and Vervain.
The JV was established in 2007 and has invested more than US$1.75bn of equity into mezzanine financing and value-add investments across Greater China.