BNP Paribas has finalised the first Nippon Export and Investment Insurance (Nexi) -backed untied loan facility granted to the government of Vietnam. The French bank closed a US$300mn term loan facility to finance part of Petrovietnam’s Dung Quat oil refinery plant – a landmark deal and the first time Nexi has guaranteed such an overseas untied loan insurance to cover both political and commercial risks on a deal cut between Japanese banks and Vietnam’s government.
Mizuho Bank and Bank of Tokyo-Mitsubishi UFJ are co-lead arrangers on the deal, with ANZ Bank joining as an arranger. Dung Quat will use the loan to build out port facilities and refineries designed to boost the development of the Vietnam’s oil sector.
The Dung Quat refinery, which costs US$2.3bn, is widely considered to be key to the economic development of Vietnam’s economy, which is growing at around 9%, but needs to continue dragging in foreign direct and institutional investment to cater to the increasingly demanding needs of a growing consumer-oriented culture.
The new refinery is slated for completion in 2009. The deal also further cements trade relations between Vietnam and Japan, which has long been an economic supporter. Hanoi’s communist politicians, despite close ideological links to China, view the mainland’s rapid economic growth with not a little fear and trepidation and fear, so Japan’s involvement in Vietnam’s market development has been warmly welcomed.
UCBH Holdings, a state-chartered commercial bank that serves the Chinese community from its base in the US, will buy the Shanghai-based Business Development Bank (BDB) for US$205mn cash, enlarging the California-based bank footprint in mainland China.
At the end of 2006, UCBH boasted assets of US$10.35bn. UCBH says it hopes to see “significant” growth opportunities in China in trade and project financing, notably at the retail level, from small and medium-sized mainland companies doing business with US corporations or divisions. Thomas Wu, chairman and chief executive of UCBH, adds that he hopes the acquisition would fast-forward the bank five years in China.