Since 2011, overseas borrowers have noted the abundant liquidity in Taiwan and banks have been bringing deals to be syndicated there. For winning global business, and introducing a variety of structures to the domestic market, Chinatrust Commercial Bank is IFR Asia’s Taiwan Loan House of the Year.
Chinatrust Commercial Bank demonstrated its structuring and distribution capabilities throughout IFR’s review period with an impressive book of business that included LBO facilities, as well as asset-based and project financings.
Having realised that it needed to be innovative for greater yield in a highly competitive domestic market – where many of its peers were more focussed on undercutting one another’s pricing levels – Chinatrust originated more structured deals than any other bank.
Chinatrust solely led a NT$4.3bn (US$148m) borrowing to back Taiwan Optical Platform Group’s reorganisation. The loan’s secured structure and timely execution allowed Taiwan Optical to carry
out its restructuring plan to spin-off non-core businesses and create a more transparent holding structure. The secured loan has margins linked to the company’s debt-to-Ebitda ratio and a pre-tax interest-rate floor of 2%.
Also on the domestic front, Chinatrust led a NT$6.4bn refinancing for contract IT manufacturer Qisda Corp, despite the negative industry outlook for the borrower and as funding costs for Taiwanese banks were rising. The refinancing, launched in late 2011, eventually closed in February 2012 with 10 other banks participating
Besides its many domestic successes, Chinatrust also originated several overseas transactions that it brought back to Taiwan for distribution to the local banking market.
While many Taiwanese banks are domestically driven, Chinatrust stands out as one of the few that is more of an international player. The bank arranged numerous cross-border deals itself and acted as a joint lead on many others.
Chinatrust solely arranged Dutch aircraft-leasing firm AerCap Holdings’ US$45m loan, which was oversubscribed to more than US$130m with 13 banks joining. The underwritten deal paid a top-level all-in of 355.4bp and was secured against two Airbus A330s with a guarantee from the borrower’s parent, AerCap.
The deal not only showcased Chinatrust’s origination and distribution capabilities, but also its expertise in structured financing.
A further stamp of confidence in Chinatrust’s structuring capabilities was shown in a US$55m leveraged financing for Partners Group’s buyout of Hong Kong-headquartered garment label maker Trimco International Holdings. Chinatrust solely led and prefunded the facility, which paid a margin of 450bp over Libor and saw three other Taiwanese banks participate.
It was Chinatrust’s first sole-led leveraged buyout financing and a pioneering deal for Switzerland-based Partners Group.
Given the unfamiliarity of Taiwanese lenders with Indonesian credits, Chinatrust impressed again as it managed to get 19 banks to join Indomobil Finance Indonesia’s US$75m loan.
Chinatrust was also the only Taiwanese bank to be involved at the top-tier level in a debut offshore renminbi loan for Uni-President China.
Knowing Taiwanese lenders’ hunger for good credits, Chinatrust, along with two other Taiwanese banks, led a rare deal for state-owned China Resources (Holdings). The US$200m loan in September was the first for a Chinese state-owned company to be led entirely by Taiwanese banks. The deal was oversubscribed with six others joining.
Pressure of compliance with Basel II and looming implementation of Basel III have made many Taiwanese banks more cautious and some arranging less, but Chinatrust was still able to secure a strong position in the Taiwan loan market and acted as agent in more than half of the deals in which it was involved.
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