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FINANCIAL SERVICES | Tony Chua, Hong Kong
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HSBC to arrange Chinatex’s Hong Kong syndicated loan

The partnership of the two companies to leverage HSBC’s Greater China strength.

HSBC and Chinatex Corporation (Chinatex) have signed a memorandum of understanding (MOU) in Hong Kong on Wednesday for HSBC to be one of the lead managers for a proposed syndicated loan for a subsidiary of Chinatex, marking the Mainland State-owned enterprise’s debut in the international capital markets.

Under the MOU, HSBC is to be among the lead arrangers for a syndicated loan not exceeding US$500 million to support Chinatex’s overseas procurement business. Within the agreement, Chinatex will engage in discussions with HSBC and other prospective participating banks on the proposed syndicated loan.

The MOU signing between Chinatex and HSBC is part of an event in Hong Kong organised by China’s Ministry of Commerce to showcase agreements established under the Mainland-Hong Kong Economic and Trade Cooperation, according to an HSBC report. 

Zhao Boya, Chairman of Chinatex, said: “Supporting our businesses of trading, manufacturing and distribution of grains, oils and textiles, we have embarked on a ‘going out’ strategy to leverage overseas capital and debt markets for financing. With HSBC as a lead arranger for our debut financing in Hong Kong, we believe we have a solid foundation for future overseas financing and investment activities. As we expect to take increasing advantage of overseas capital markets, there should be more opportunities for us to co-operate with reputable global financial institutions like HSBC going forward.”

Helen Wong, Group General Manager and President and Chief Executive Officer of HSBC Bank (China) Company Limited, said: “We are very pleased to be among the primary partners supporting Chinatex as it debuts on Hong Kong’s international capital markets. As the largest international bank in the Greater China region with over 270 service outlets, our experienced teams in mainland China and Hong Kong and our strong capital markets capability in Hong Kong, we are able to provide a seamless financial service to large Chinese corporations like Chinatex as they look to expand overseas.” 

Hong Kong’s capital markets are receiving increased attention as a strategic platform for Chinese enterprises’ looking at overseas expansion. As the largest international bank in the Greater China region, HSBC plays an important role in this development. Among the top 100 Chinese enterprises that have overseas investments, 60 have a business relationship with HSBC. 

In addition to the proposed Chinatex syndicated loan, HSBC has been involved in four of the five overseas syndicated loans guaranteed by Mainland parent companies in the year to date. These comprise the US$5 billion five-year syndicated loan for China Petrochemical Corporation, a US$350 million three-year syndicated loan for Sany Heavy Industry Co., Ltd., a US$235 million three-year syndicated loan for Midea Group and an upcoming five-year syndicated loan for China Minmentals Corporation. In the debt markets, HSBC also led three of the four Mainland-backed global bond issuances, including the US$500 million five-year Reg S bond for China Metallurgical Group Corporation, RMB1.15 billion dim sum bond for Beijing Capital Land and RMB2.5 billion dim sum bond for China Eastern Airlines Corp. Ltd. 

HSBC Bank China initially formed a relationship with Chinatex in July 2010, establishing credit facilities to support the working capital and international trade financing needs of Chinatex and its affiliates. The collaboration between the two companies has been a success and both parties expect to explore additional business co-operation in future.

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