Chongqing Grain Group (CGG) has secured a three-year US$187.5mn loan – its first syndicated facility.

The loan was arranged by DBS Bank China (mandated lead arranger, bookrunner and facility manager) and will be used to support the state-owned enterprise’s overseas expansion. Rabobank and First Commercial Bank were lead transaction agents.

Joining on the syndicate were CTBC Bank, Cathay United Bank, Chang Hwa Bank Kunshan, First Sino Bank, Hua Nan Shenzhen, Land Bank of Taiwan and Banco MPS, who all acted as senior managers.

CGG is borrowing through two subsidiaries: Chongqing Red Dragonfly Oil and Everwin Cereals and Oils. The finance is guaranteed by the parent group.

GTR understands that the loan is the largest arranged by a foreign bank in the city of Chongqing to date and the first to be arranged by a foreign bank in the city for three years.

Speaking of the significance of CGG to the region, DBS China’s head of institutional banking tells GTR: “CGG is a leading grain and edible oil group in China and the largest in Southwest China. The group plays a key role in carrying out the government’s initiative to ensure stability in the supply and price of grain and oil in Chongqing. The group supplies 55% of grain, 30% of edible oil to Chongqing, and has the largest sales network and 40% storage capability of Chongqing market.”
He says that CGG being a state-owned enterprise didn’t present any unforeseen challenges, given its strong balance sheet and credentials, but that there are always hurdles to overcome when structuring a debut syndicated loan.

He continues: “As this is CGG’s first syndicated loan, we spent a lot of effort introducing and explaining the background and industry information of CGG to the lenders as most of them have no prior relationship with CGG. Along with the rapid growth of Western China in recent years, there are many good clients like CGG who are interested in exploring new financing channels with new partners for expansion purposes.”