Shipbuilders Get Domestic Support

China Rongsheng Heavy Industries (“China Rongsheng”) has proved to be a clear favourite among Chinese banks, after securing (yet again) another massive facility with China Development Bank (“CDB”). On 22 December 2011, the Hong Kong listed shipbuilder signed a USD 100 million loan facility with CDB, Hong Kong branch. The offshore USD dollar loan marked a significant milestone for CDB Hong Kong that was set up in 2009 as the bank’s launch pad to serve Chinese enterprises
internationally.

One of Taiwan’s largest private shipbuilders, Jong Shyn Shipbuilding, had also found similar success with the domestic lenders, having inked a TWD 1.2 billion (USD 39.7 million) five year syndicated facility through joint bookrunners and mandated lead arrangers – Taichung Commercial Bank, Taiwan Business Bank, and Taiwan Cooperative Bank. Agricultural Bank of Taiwan, Bank of Kaohsiung, Bank SinoPac, Chang Hwa Commercial Bank, Cosmos Bank Taiwan, Hua Nan Commercial Bank and Shanghai Commercial & Savings Bank took part as participants.  Continue Reading

Update on Evergreen Marine’s USD 824 million loan

A few more details have emerged on Evergreen Marine’s recently concluded USD 824 million syndicated facility. The loan, which was made up of two USD 247 million tranches and a USD 330 million tranche, was secured through its three subsidiaries Evergreen Marine Corp (Taiwan), Evergreen Marine (UK) and Evergreen Marine (Singapore). According to sources, the pre-delivery loan components were priced at 95 bps above LIBOR and the post-delivery portions were at 90 bps in excess of LIBOR. The facility was also structured in such the way that should the difference between Taiwanese inter-bank rates Taifx and LIBOR exceed by 35 bps, Evergreen will have to pay the lenders the excess over the 35 bps spread differential.

The syndicated loan, payable over ten years, was arranged by Bank of Taiwan, Land Bank of Taiwan, Taiwan Cooperative Bank, Taipei Fubon Commercial Bank, E.Sun Commercial Bank. Chang Hwa Commercial Bank, First Commercial Bank, Hua Nan Commercial Bank and Mega International Commercial Bank joined in as participants. Proceeds will be used to finance the construction of ten 8,000 TEU post-panamax containerships ordered at Taiwanese shipbuilder CSBC Corp for USD 1.03 billion in May 2011. Continue Reading

China Rongsheng Inks Another Massive Credit Facility

On Monday, Hong Kong listed China Rongsheng Heavy Industries Group Holdings signed a strategic collaboration agreement worth RMB 30 billion (USD 4.7 billion) with China Development Bank in the Chinese city of Nanjing. A large chunk of the facility will go towards its offshore engineering division. We note that Rongsheng has signed many similar corporative agreements with numerous Chinese lenders including China Exim, Bank of China, China Everbright Bank, China CITIC Bank and Agricultural Bank of China since August 2010, of at least total of over RMB 129.5 billion (USD 20.2 billion!).

We also have more details on Rongsheng’s recently completed USD 220 million offshore syndicated loan. Sole book runner Credit Agricole took up the biggest slice in the loan of USD 40 million while four lead arrangers Societe Generale, Aozora Asia Pacific Finance, Bank of East Asia and Bank of Tokyo-Mitsubishi UFJ committed USD 30 million each. Cathay United Bank chipped in USD 20 million. Italian bank Banca Monte Dei Paschi di Siena, Taiwanese lenders Chang Hwa Commercial Bank and Hua Nan Commercial Bank, as well as Metropolitan Bank and Trust in Philippines rounded up the syndication and contributed USD 10 million each. The loan offers the lenders a margin of LIBOR plus 130 basis points and is guaranteed by China Exim Bank.

USD 495 million Debt Raised?

The remarkable turnaround in the container shipping sector in 2010 has led to a significant improvement in the banks’ appetite for containerships. Just as Neptune Orient Lines announced the firm financing offers it received for its new boxships, Evergreen Marine had no problem raising debt for its ships either.

The Taiwanese operator raised USD 330 million bank debt from a syndicate of domestic banks that was led by mandated lead arrangers Chang Hwa Commercial Bank, First Commercial Bank, Land Bank of Taiwan and Mega International Commercial Bank. The seven year shipping loan was priced extremely favourably at 85 bps over three-month LIBOR and was made up of four USD 82 million tranches, which we believe will be used to pay for four 8,000 TEU boxships. Three other Taiwanese banks – Chinatrust Commercial Bank, Hua Nan Commercial Bank and Cathay United Bank were also roped in as participating lenders. Continue Reading

A Noble Breed

Last week, our sister publication Freshly Minted reported on Maersk’s successful EUR 750 million (USD 1.3 billion) five-year bond. This was the shipping conglomerate’s first bond issuance, following a recent equity offering of USD 1.7 billion. In Asia, commodity trading house Noble Group has likewise found tremendous success in raising funds, suggesting that investors and bankers are getting warmed up to investing cash again. Continue Reading