Export-Import Bank of China (Exim) will borrow US$260 million from nine banks to support expanding trade financing and overseas investment by Chinese companies, according to Bank of China (BOC), which is arranging the loan.

 

The bank will sign the loan agreement on February 20, according to Wang Tong, head of BOC's debt capital markets.

 

Exim had initially asked for US$200 million, but raised its request 30 percent to US$260 million after lenders offered US$300 million, Wang said yesterday in Beijing.

 

Beijing-based Exim will pay interest 0.25 percent higher than London Interbank rates. Wang added that this is Exim's second dollar-denominated loan since November 2004. It took a US$500 million five-year loan then arranged by Citigroup Inc.

 

The other eight lenders are Royal Bank of Scotland Group Plc, Sumitomo Mitsui Banking Corp, ING Greop NV, Bank of Montreal, HSBC Holdings Plc, BNP Paribas SA, Bank of Tokyo-Mitsubishi UFJ Ltd and Mizuho Corporate Bank Ltd, Wang said.

 

BOC and its strategic investor, Royal Bank of Scotland, will each lend US$60 million, Wang said. Royal Bank of Scotland, the UK's second biggest bank, said in August it will join with Merrill Lynch & Co and the Li Ka Shing Foundation to pay US$3.1 billion for 10 percent of BOC.

 

Exim lent 95.9 billion yuan (US$11.9 billion) in trade financing in the first half of 2005, as published on its website. In July 2005, it raised US$1 billion from a 10-year bond issue.

 

(China Daily February 9, 2006)