Société Générale Corporate & Investment Banking (SG CIB) has announced the coming into force of an export financing package arranged in favour of Ho Chi Minh City Investment Fund for Urban Development (HIFU). This was structured for the construction of the Phu My Bridge in Vietnam, by the BBBH consortium, comprising Bilfinger Berger (Germany) and its Australian subsidiary Baulderstone Hornibrook.
As mandated lead arranger and Euler Hermes agent, SG CIB arranged a financing package comprising a US$87mn Euler Hermes-covered buyer credit, together with a US$34mn tied loan.
Whilst the Vietnamese government is guaranteeing both facilities, the buyer credit also benefits from comprehensive cover from the German Export Credit Agency (ECA) Euler Hermes, which in turn is being reinsured by French ECA Coface and the Australian ECA EFIC.
This transaction sets a precedent as the first deal in Vietnam with a private corporate acting as project developer, with the benefit of a state guarantee through HIFU acting as borrower and on-lender.
SG CIB was able to further capitalise on its experience gained in Vietnam on previous export credit transactions in recent years. With the strong involvement of the ECAs, together with the continuous support of the BBBH consortium and its constructive sourcing arrangements, SG CIB claims it was able to structure an attractive financing package exactly matching the expectations of the borrower and of the Vietnamese authorities.
The result is an innovative financing package enabling the borrower to benefit from a combination of syndicated covered export credit and tied commercial loan and local financing, allowing the successful implementation of the Phu My Bridge project.
The transaction has been syndicated with Calyon acting as co-lead arranger and lender with the local bank BIDV also involved in providing complementary financing.
The Phu My toll bridge is a high profile project, strongly supported by the public authorities. It involves the construction of a 2km long cable-stayed bridge across the Saigon River in Ho Chi Minh City (HCMC). This bridge will be of paramount importance. It will alleviate the city’s traffic pressures, serve the port system of HCMC and boost the city’s socio-economic development through stronger trade exchanges between the Mekong delta and the Southeast provinces of the country.