A syndicate led by Citi has extended a US$300mn loan to Vietnam National Coal and Mineral Industries Holding Corporation (Vinacomin).
Citi was the sole Nippon Export and Investment Insurance (Nexi) coordinator and joint lead arranger, along with Mizuho, Sumitomo Mitsui and the Bank of Tokyo-Mitsubishi UFJ.
The facility was structured as a senior, unsecured loan, unconditionally guaranteed by the Vietnamese ministry of finance. The tenor is 13 years and three months and there is an off-take arrangement between Vinacomin and the Japanese general trader Marubeni, who will be Vinacomin’s export partner. The pricing of the loan remains confidential.
The loan will be used to construct Vietnam’s first bauxite and alumina project and Vinacomin president Le Minh Chuan confirms that it is the largest financing package the organisation has ever received.
Regional head of export and agency finance for Citi in Asia Pacific Sumanta Panigrahi tells GTR that despite a lack of liquidity in the US dollar market, the bank was pleased at the competitiveness of the pricing it was able to deliver.
Panigrahi describes Vietnam as a “compelling growth story, due to its demographic profile, strategic location, growth aspirations and significant investment needs in core growth sectors of the economy”.
He says: “Apart from being an attractive investment destination for multinationals looking to develop a regional manufacturing base or looking to tap the domestic market, Vietnam is also an important market for financiers in light of the continued need for long-term investment capital to fuel the growth of the economy.”
Panigrahi praises the “traditionally very active” presence of export credit agencies Japan Bank for International Co-operation (JBIC) and Nexi, particularly in sectors such as power, resources and petrochemicals and in geographies such as Vietnam, Indonesia, the Philippines and Australia.
He tells GTR: “More recently, Nexi has made effective use of its untied financing programmes to support projects which directly and tangibly benefit Japanese interests and investments in Asia. Now, JBIC and Nexi are increasingly focused on development-orientated projects in ‘new frontier’ markets such as Mongolia and Myanmar.
“Citi has had a very good and co-operative relationship with both Nexiand JBIC. In Vietnam for example, Citi has lead arranged four important financings with Nexi’s support in recent years: the US$500mn Euler Hermes and Nexi financing for Petrovietnam Power Nhon Trach 2; the US$270mn Nexifinancing for the Hanoi-Hai Phong Expressway through Vietnam Development Bank; the US$200mn Nexi financing for National Power Transmission, and now the US$300mn Nexi financing for Vinacomin.”