In the second part of an export finance transaction, SG corporate and investment bank and BNP Paribas energy commodities export project (ECEP) have raised Euro75.2 million for the construction of a cement plant in Vietnam.
The Cam Pha cement plant in the north of the country will have an annual capacity of 2.3 million tonnes and is being sponsored by the Vietnam Construction and Import-Export Corporation (Vinaconex).
The first part of the transaction was closed in October last year, when Euro20 million was raised to build a grinding plant with an annual capacity of 1.5 million tonnes.
This initial deal was completed with the support of Euler Hermes, the German export credit agency, and Coface, the French ECA - combining three German buyer credits and one Coface buyer credit under a single facility. The loan was backed by a sovereign guarantee from the Vietnamese government.
The cement plant construction involves five different suppliers from Japan, Germany and Switzerland that have individually negotiated their contracts with Vinaconex. SGCIB and BNP Paribas worked with three separate credit agencies - Japan's JBIC and NEXI, Germany's Euler Hermes and Switzerland's ERG - to structure the deal for Vinaconex.
The banks say the deal is based on a "clear cash flow and payment synchronization logic". It includes a European facility combining three Euler Hermes-covered credits and one ERG-backed credit facility benefiting from one unique repayment starting point. And a Japanese facility benefiting from JBIC's direct financing and NEXI's support adapted to the Japanese package.
This is the first Japanese buyer credit to Vietnam in five years. The last transaction was in 1999.
The facility allows Vinaconex to synchronize payments out of the cash flow generated by the cement plant. The loans have a 10-year reimbursement period with embedded fixed-rate options based on CIRR and interest rate swaps, with a partial capitalization of the interest during construction.
This deal, too, is guaranteed by the Vietnamese government.