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Banking syndicate extends US$16b loan
By Liang Yiwen |
April 1, 2009, Wednesday
|
Print Edition
Print Edition
FIFTEEN banks in Shanghai yesterday lent a total of 108 billion yuan (US$15.8 billion) in the biggest loan syndicate to help develop Pudong New Area.
Of the total, 61 billion yuan will go toward major construction projects such as the metro lines, 37 billion yuan will go to key industries such as logistics, shipping and biopharmaceutical.
The balance of 10 billion yuan will be used to help cash-strapped smaller enterprises.
Expo-related projects and major infrastructure works such as metro line construction will get top priority for loans.
Export companies that are battered by shrinking external demand due to the global economic crisis will also get loans.
With the Pudong government's support, the Export-Import Bank of China will offer low-interest loans totaling 5 billion yuan to struggling export enterprises. The three-year loans come with an annual interest rate of 3.51 percent, lower than the current three-year benchmark interest rate of 5.4 percent.
The Shanghai Bureau of the China Banking Regulatory Commission has been calling for more loan syndications to support the local economy.
A loan syndicate can help cut a single bank's risks as all the banks in the syndicate share the risks.
Pudong New Area is at the center of the city's blueprint to develop into a major international financial center and shipping hub by 2020. Big name financial players like HSBC and Citi have already located their China headquarters in Pudong New Area.
Of the total, 61 billion yuan will go toward major construction projects such as the metro lines, 37 billion yuan will go to key industries such as logistics, shipping and biopharmaceutical.
The balance of 10 billion yuan will be used to help cash-strapped smaller enterprises.
Expo-related projects and major infrastructure works such as metro line construction will get top priority for loans.
Export companies that are battered by shrinking external demand due to the global economic crisis will also get loans.
With the Pudong government's support, the Export-Import Bank of China will offer low-interest loans totaling 5 billion yuan to struggling export enterprises. The three-year loans come with an annual interest rate of 3.51 percent, lower than the current three-year benchmark interest rate of 5.4 percent.
The Shanghai Bureau of the China Banking Regulatory Commission has been calling for more loan syndications to support the local economy.
A loan syndicate can help cut a single bank's risks as all the banks in the syndicate share the risks.
Pudong New Area is at the center of the city's blueprint to develop into a major international financial center and shipping hub by 2020. Big name financial players like HSBC and Citi have already located their China headquarters in Pudong New Area.
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