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Overseas medium to long-term financing
1 Product Introduction

Overseas medium-and-long-term financing facility includes overseas syndicated loan and export buyer’s credit business.

1.Overseas syndicated loan business is a service whereby at least two banks provide loan or credit line to a borrower registered abroad (including HK, Taiwan and Macau) based on the same loan terms and with different duties and sign the same loan agreement. Usually, one bank is appointed as the agency bank to manage the loan business on behalf of the syndicate members.

2.Export buyer’s credit is a service whereby CMB’s domestic and overseas branches and offshore financial centers offer a medium-and-long-term financing facility to overseas borrowers to fund importers (owners)’ purchase of products, technology or service exported from China.

2 Target Customers

1. Overseas syndicated loan can meet big enterprises’ large and long-term demand for funds. Syndicated loan can reduce nuisances caused by numerous negotiations with different banks, shorten the time spent in financing, help borrowers borrow at the market rates, lower interest costs, and balance a sound liability structure of both local and foreign currencies. Chinese enterprises’ overseas investment, M&A, project construction, capital operation or debt arrangements always involve huge amount of money, complex transaction structure, and numerous stakeholders. Syndicated loan is tailored to the needs of big enterprises.

2. Export buyer’s credit supports the export of homebred products, technology and services, as well as external project contracting that can promote the export of homebred equipment, construction machineries, building materials, construction technology, management methods and labor service export. The capital goods export or overseas project contracting involves huge capital amount and would take long time to recoup capital. Therefore, importers may be unable to make payment at sight. Under such circumstance, customers may consider using the export buyer’s credit.

3 Product Advantages

(1) Advantages of overseas syndicated loan

1. Strong and recognized capability of leading and organizing syndicated loan CMB’s overseas linked platforms, such as CMB Wing Lung Bank, has demonstrated strong capability in leading and organizing provision of overseas syndicated loans. CMB acted as the leading arranger, book runner and agent bank for many syndicated loans provided to Chinese enterprises listed abroad, large state-owned enterprises and renowned private-sector enterprises. Based on its judgments about market conditions and loan projects’ prospects, CMB can provide “distribution after underwriting” organization mode to fulfill customers’ demand concerning delivery and trading.

2. CMB has professional teams that can ensure good handling of loan application and high efficiency in distribution CMB’ professional syndicated loan teams in domestic and aboard market can handle syndicated loan application in a professional and process-based manner. Its front, middle and back-stage staff have rich experience in syndicated loans. CMB works in a standardized manner in every step of providing syndicated loan service, which includes negotiation and engagement with customers about preliminary document and clauses preparation, syndicated loan market test, book running and distribution, and negotiation and signing of lending agreement. Our team will closely monitor every step, with the goal of keeping risks under control and ensuring smooth operation of syndicated loan provision.

3. Our access to global resources enables us to provide “one-stop” commercial and investment banking solution that well complements syndicated loans. CMB has established branches in financial centers and capital hubs such as New York, London, Luxembourg, Sydney and Hong Kong. Through its linked platforms that include both domestic and overseas branches, CMB can build a linked operating mechanism tailored for customers and syndicated loan business. Under such mechanism, different branches of CMB jointly serve customers, raise funds, mitigate risks, and consolidate resources and advantages in terms of capital, channel and operating network. On the strength of this unique capability, CMB is able to provide a one-stop complementary package for overseas syndicated loans, which includes tradeoff matchmaking, bridge loan, exchange rate risk hedging, etc.

(2) Advantages of export buyer’s credit

1. Benefits for exporters

(1)The product can help importers get loans, thereby helping exporters attract customers.

(2)The product can ensure security in collection of payment for goods, and shorten payment period.

(3)The product will not cause any liability to exporters, so it will not lead to any deterioration in exporters’ balance sheet.

2. Benefits for importers

(1)The product is a direct financing product for importers. Its commercial cost and financing cost are separated, with transparent fee structure. This can conducive importers in negotiation.

(2)The product provides a new financing channel for importers, as it helps importers get a long-term loan (deferred payment) from sellers’ countries.

All the contents stated above are for your reference only. Please consult the local branch of China Merchants Bank for further information. China Merchants Bank reserves the ultimate right of interpretation for the contents in this page.