Daewoo International Corporation has chosen HSBC’s renminbi export documentary credit forfaiting solution in Korea. According to HSBC, this is its first sizeable renminbi finance deal in the country, with Daewoo International expecting its forfaiting volumes to reach $100 million per month for the 6-12 month tenor.
“As Korean chaebols like Daewoo International continue to expand overseas, they are able to leverage HSBC’s global network and in-depth knowledge in order to capitalise on international business opportunities,” said Hyun Sook Son, head of trade and supply chain at HSBC for Korea. “The success of this deal paves the way for more renminbi finance opportunities in Korea.”
With HSBC’s solution, Daewoo International will be able to allow its Chinese buyers to settle in renminbi which may give them an additional advantage when bidding for business. HSBC says that Daewoo International’s buyers will also be able to reduce currency hedging and foreign exchange costs, while diversifying their currency portfolio and enjoying a longer tenor of financing when compared to a US dollar tenor and at a lower rate.
Simon Constantinides, Asia-Pacific head of trade and supply chain at HSBC, believes that as the renminbi becomes a more popular settlement currency, HSBC “will continue to provide our clients with a significant advantage, whether they choose to conduct business on a local, regional or global level”.
HSBC has strengthened its trade finance business this year with several hires including the expansion of Constantinides’ role and the appointment of Terence Chiu as head of trade and supply chain for Hong Kong at the beginning of last month. In addition, John Saunders joined the bank at the beginning of June as its new structured trade head for Australia. Meanwhile, Wei Wei Ng was appointed head of trade and supply chain for Malaysia in February and Vinay Mendonca was appointed head of global traditional trade product in January.
