Taiwan’s Ministry of Finance specifically asked for details of banks’ lending to two troubled privately-owned Chinese companies – Ultrasonic AG and Golden Meditech Holdings Ltd.
A $60 million, three-year unsecured loan for Frankfurt-listed shoemaker Ultrasonic was accelerated on September 17 after two of the company’s executives disappeared with the loan proceeds. The creditors agreed to enter into further negotiations with Ultrasonic to try to avoid insolvency. Nomura co-ordinated Ultrasonic’s loan, which was signed in early August and Cathay United Bank was the agent. The loan had heavy Taiwanese participation – Chang Hwa Commercial Bank Singapore, Taiwan Business Bank Hong Kong and Taiwan Cooperative Bank OBU joined the deal as mandated lead arrangers. Cosmos Bank Taiwan and Hwatai Bank also participated. Taiwnese banks are now seeking additional protection to keep lending to Chinese companies after Ultrasonic’s high-profile loan default as the risks of lending to mid-sized Chinese companies that are being squeezed by the slowdown mount. “A standby letter of credit or other security on loans for Chinese privately-owned companies is a must for us in light of the Ultrasonic default,” a Hong Kong-based senior loan banker with a Taiwanese state-owned bank said.
Loans for Hong Kong-listed Chinese healthcare company Golden Meditech were also in the spotlight in September.
Wed Oct 8, 2014 11:19am EDT
Taiwan’s MOF asks banks for details of Chinese loans
LONDON | BY CAROL ZHONG Continue reading