Export-Import Bank of China (Chexim) is making its loan market debut with a $200 million five-year term loan. Citigroup has been mandated to arrange the financing and launched the deal into syndication on September 14. The loan is the first of its kind in the People's Republic of China, although last year China Development Bank became the first Chinese financial institution to tap the onshore dollar bond market with a $500 million issue.
Chexim is solely owned by the government, through which state policies relating to industry, foreign trade and economics and finance are implemented. Citigroup has invited domestic banks and international institutions with branches in the PRC to participate in the deal.
The facility pays a margin of 35bp over Libor and is being offered at an all-in yield of 40bp to banks joining at the top tier.
A number of loans have come out of China this year, with Dealogic figures showing that around $5.3 billion has been raised from 24 deals to date. The latest transaction to be completed is the $100 million three year fundraising for China Minmetals, which was closed in August after an overwhelming response from the market.
BA Asia, DBS Bank, ING Bank and Standard Chartered arranged the credit for the government owned trader of minerals and metals, offering all-in pricing of 45bp to the top level. The loan was heavily oversubscribed but not increased and saw participation from 10 banks in syndication.
The arrangers achieved a sell down of 72% of the paper. Elsewhere in Asia, a number of policy banks have successfully tapped the loan markets.
Indian plays have ridden the wave of syndicated lending coming out of the sub-continent as investors rush to tap into the country's recent success story. The Export-Import Bank of India raised $75 million via a 364 day loan in May.
Standard Chartered led the financing that featured all-in pricing of 40bp. The deal was well received by banks and the amount was increased from $50 million.
There was also a $40 million one year facility for IDBI Bank completed in August. Natexis Banques Populaires and Oversea-Chinese Banking Corp ran the books on the deal and were joined by seven banks in syndication. A top level yield of 48bp was offered to top tier banks.
The closest comparable for this year is the $200 million two and three year fundraising for BBB+ rated Korea Development Bank signed in April. That deal paid a top tier all-in of 28bp for three year money, well inside the low 40s that will be paid on the current Chexim deal.
A banker close to this financing believes the loan will appeal to potential lenders due to "the attractiveness of a loan with a five year tenor compared to the 2014 bond". One senior banker agreed with this assessment suggesting that the rarity value of the paper alone should create high demand from investors.
A bank meeting will be held in Beijing on September 21 and the arrangers expect to tie up the syndication in October.