BOT to Lead Taiwan’s First-ever Syndicated Loan to Chinese Enterprise

Taipei, Aug. 27, 2012 (CENS)--The Bank of Taiwan (BOT), a government-linked bank here, takes the lead in extending a syndicated loan of US$125 million to China Huiyuan Juice Group, China’s leading juice and beverage producer; and the lending contract is expected to be signed at the end of August at the earliest. This will be the first syndicated loan granted to a Chinese enterprise by a lending consortium headed by a Taiwanese bank.

Other than Taiwanese banks, the Taipei branch of Bank of China, a state-run Chinese bank, reportedly joins the lending consortium as well. The interest rate of the said loan is set at LIBOR plus 350 basis points (1 basis point = 0.01%), higher than the corresponding LIBOR plus 200 basis points offered to Taiwanese enterprises operating in China.

Insiders disclosed that BOT’s Hong Kong branch has recently underwritten a syndicated loan of US$150 million extended to China Petroleum and Chemical Corp., a state-run firm in China, at lending rate of LIBOR plus 200 basis points.

It seems that Taiwanese banks can generate better profits from financing Chinese enterprises with relatively higher rates than the ones offered to Taiwanese enterprises.

In addition to BOT, two other government-linked Taiwanese banks--Mega International Commercial Bank and Taiwan Cooperative Bank—are also interested in financing Chinese enterprises. The former is said to organize a lending consortium to extend a loan of US$250 million to Bosideng International Holdings Ltd., China’s largest down apparel company; and the latter is to lead a syndicated loan of US$50-65 million offered to JWC-Group, a Hong Kong-listed Chinese manufacturing company turning out mainly hygienic product machines.