The London branch of the Industrial and Commercial Bank of China (ICBC) has received its biggest loan facility to date. The bank, which last September became the first Chinese one to receive a UK branch licence, has signed a loan facility agreement worth US$1bn. The transaction was launched at US$500mn, but it was significantly oversubscribed, with the facilities being increased and the lenders scaled back.
The facility’s goal is to “refinance existing facilities, increase amounts and extend maturities”, Benny Zachariah, ICBC’s head of syndication and sales, tells GTR, adding that how much will be used for international trade is “dependent on business opportunities”.
We intend to continue building on this momentum and establish ourselves as a credible and capable banking partner. Jin Chen, ICBC
The facility is divided between a 2-year, US$550mn tranche priced at 60bp over Libor, and a 3-year, US$450mn tranche, priced at 80bp over Libor. Several banks were involved in the facility, including Lloyds Bank as co-ordinator and Wells Fargo as facility agent. Lloyds and Wells Fargo also participated as bookrunners and mandated lead arrangers (MLAs), along with ANZ, Bank of America Merrill Lynch, Barclays, BNP Paribas, HSBC, ING, and Standard Chartered. Commerzbank, JP Morgan and Landesbank Baden-Württemberg were also MLAs.
“This transaction is an important milestone for ICBC in London, highlighting not only the strong relationships we have in the market but also underlining the growing credibility of Chinese banks being able to raise financing in the loan market,” says Jin Chen, managing director of ICBC London. “With the London Branch now firmly in place we intend to continue building on this momentum and establish ourselves as a credible and capable banking partner,” she adds.
ICBC is the world’s biggest bank by market capitalisation. Its growth slowed down to 1.4% in Q1 of this year – a drop widely attributed to the slowdown in the Chinese economy.