Formosa Plastics signs two-year loan

Delays notwithstanding, the deal achieves the rare distinction of having an offshore branch of a Mainland Chinese bank participate in a loan indirectly related to a Taiwanese company.

Formosa Plastics Corporation USA earlier this week signed a two-year loan arranged by CitibankSalomon Smith Barney. Following the closure of syndication last week, the deal raised $320 million for the borrower. The original size of the deal was $350 million. However, banks can still join in the deal within six months of the signing date, which could see the size of the deal being increased.

The borrower is the wholly-owned subsidiary of Taiwan-based Formosa Plastics, which manufactures and markets plastics materials and chemical fibre products. The average life of the loan is 1.75 years. The loan, with a lenders' put option, is extendible after two years and offers a margin of 82.5bp over...

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