credit-suisse-wins-700-million-vietnam-deal

Credit Suisse wins $700 million Vietnam deal

The Swiss firm is mandated to arrange up to $700 million in financing for VietnamÆs state-run shipping company Vinalines.
Credit Suisse signed an exclusive agreement on Monday to arrange financing of up to $700 million for state-run Vietnam National Shipping Lines, better known as Vinalines.

Vinalines, which is a shipping, ship brokering and freight-forwarding company as well as a port operator, plans to use the money it raises for expansion of its existing four port operations.

On July 19, Vinalines received a license from the government to build a Vnd3 trillion ($185 million) port complex in the central region of the country. It plans to upgrade the Van Phong Port in Khanh Hoa provinceÆs Van Phong economic zone into a state-of-the-art international facility with two berths able to accommodate international cargo vessels.

"Vinalines wants to develop a long-term strategic partnership with Credit Suisse and we have selected Credit Suisse to arrange our first offshore corporate loan, Mai Van Phuc, president and CEO of Vinalines says. Officials from the shipping company, and the bank made the announcement during a ceremony held in the presence of VietnamÆs prime minister Nguyen Tan Dung during an official visit to Singapore.

In January this year, in another ceremony û this one at Davos, Switzerland û where VietnamÆs prime minister was also present, Vinalines and Credit Suisse signed a memorandum agreeing to work together, with the bank promising future financing, as well as ratings advice, fund raising work and risk management assessment.

The hullabaloo underscores VinalinesÆ importance in the nation. The new port, after all, is expected to play a crucial role in the nationÆs shipping development, as it could serve as an international trans-shipping point for shipments from ASEAN nations going to Europe, North Asia, as well as Australia and East Asia. Work is expected to start on the project in the first quarter of next year and be completed by 2010.

Meanwhile, Credit SuisseÆs banking work in Vietnam is well documented. It has been VietnamÆs ratings advisor since 2002, assisting the country in obtaining its first-ever ratings from both Standard & PoorÆs and Fitch. It was also the sole bookrunner of the nationÆs $750 million debut sovereign bond issue in 2005. More recently, in June, it was the ratings advisor and sole arranger of a $600 million loan to Vietnam Shipbuilding Industry Group (Vinashin). The loan is the largest offshore corporate loan to-date arranged for a Vietnamese company.

Credit Suisse has also been recently mandated by Vietnam to advise on the first major ôequitisationsö (which is VietnamÆs phrase for initial public offerings) and strategic sales of Vietnamese corporations, including the Vietnam Insurance Group (BaoViet) equitisation, and the much anticipated Bank for Foreign Trade of Vietnam (Vietcombank) equitisation. The state-owned Vietcombank is slated for equitisation of 30% of its shares sometime this month, or possibly September. The IPO is expected to raise about $300 million, based on the par value of shares excluding any premiums, with 15% to foreign strategic investors and 15% to domestic investors (though foreigners with licenses can access this market as well).
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