deals
Successful syndication
Cross-border cooperation
What's NewS Issue 4 June/ July 2000 I
In early June, Rabobank's Hong Kong
Branch successfully closed a HKD
2,900 million (USD 370 milbon) 5-year
dual currency syndicated revolving
credit/term loan facility to China Re
sources Enterprise, Limited (CRE). CRE is
a top-tier Chinese conglomerate based in
Hong Kong. The group has established a
strong presence of its brewery operations
in northeastern China through a joint ven
ture with South African Breweries (SAB).
Bringing in a total of 22 banks, the trans
action was oversubscribed by 45 front
HKD 2,000 million to HKD 2,900 mil
lion. The overwhelming niarket response
and the wide geographical spread of the
syndicate members clearly reflect the con-
fidence and support of the banks towards
strong Chinese corporates, like CRE. The
proceeds of the facil
ity will be used for
general corporate
funding requirements
of CRE and its sub-
sidiaries.
Capitalizing on a
strong relationship
with the cliënt and the
F8cA partnership
bank status, our Hong
Kong office succeeded
in winning CRE's
mandate out of 10
bidding banks to
jointly lead arrange
and underwrite this major transaction
with HSBC and Drcsdner. The transaction
also positioncd our Hong Kong branch as
the facility agent and the
documentation agent of
the facility. Top players
who secured the deal in-
clude Hong Kong's Alex
Cheung, deputy general
manager, May Tung of
corporate finance, Eric
Poon (Senior Manager,
HK Branch) and Brian
But of syndication. Ruurd
Weulcn Kranenberg, gen
eral manager Greater
China and Peter Green
berg, regional E&A sector
manager for SE and NE
Asia, also provided valuable input and
support leading to the successful conclu-
sion of the transaction.
-hina Resources enter»se. lim
CD 2.900.00ll 1
redit Termjl ft
Af the signing ceremony: on behalf
of 22 syndicate members, Ruurd
Weulen Kranenberg toasting Frank
Ning, chairman of CRE.
Close cooperation between Project Fi
nance Utrecht, New York and Lon-
don syndications and the legal and back
office departments in Utrecht enabled
Rabobank International, as a joint
arranger, to successfully arrange, under
write and syndicate an off-balance syn-
thetic lease financing package for the
strategie investment of Dow Chemical in a
ncw statc-of-the-art ethylene cracker in
Terneuzcn, the Netherlands. To finance
the USD 420 million transaction, RI
teamed up with Bank of America and
ING Barings, who bring to the table expe-
rience in synthetic leases and a close rela
tionship with DOW. RI provided addi-
tional knowledge on the Dutch legal and
tax situation as well as Dutch content to
the arranging consortium.
Dow Benelux N.V. has leased an object
which is not yet operational - the naphtha
cracker is still under construction - creat-
ing a synthetic lease structure. While the
structure is largely account-driven, it also
offers Dow additional tax benefits. As
owner of Dow Benelux, The Dow Chemi
cal Company can keep the investments in
the naphtha cracker off-balance sheet (un
der US GAAP, which considers the lease
operational), while Dow Benelux main-
Strategic move in the Netherlands: high tech
crackers in Terneuzen
tains the right to depreciate the assets (for
Dutch tax purposes, as the lease is consid-
ered financial).
The tenor of the financing is maximally
seven years, consisting of 2.5 years con
struction period and 4.5 years operational
period. It's likcly that at the end of the
construction period Dow will opt for a US
cross-border lease for the naphtha cracker
to benefit from accelerated depreciation in
the US. The current financing structure
offers the flexibility to easily enter into
such a lease without finding a new US
trust.
In addition to the attractive remuneration,
the transaction offers the opportunity to
strengthen the relationship with both
Dow Benelux N.V. and The Dow Chemi
cal Company. The successful closing of
this transaction comes as a result of close
cooperation between Project Finance, syn
dications London and New York and cash
management services. Key contributors to
the transaction includc Roger Jansen, Rik
Reisinger, Casper Rodenberg, Gerrit Jan
Tuijtcn, Emmanuel de Wit and Casper
Hoogendoorn (Utrecht), Wink Mora
(New York), and Julian Lewry (London).
a AAA rated bank.
This transaction is a prime example of
cross border teamwork involving staff
from nine branches around the world and
the cooperation of the legal, fiscal and
regulatory areas of Rabobank Nederland.
In total, over 100 people throughout the
network have assisted in this transaction.
Primary contributors includc: London -
Bob Adler, Graham Bruce, Andrew Gates,
Mark Gheerbrant and James Walters
(structurers) and Eugen Buck, Gordon
Harris, Christine Hogg, Mark Trister.
Utrecht - Jan Bos, Bert Bruggink, Adri
Meijdam, Ed Kok, and Eduard Sartorius.
In addition, many thanks are extended to
the Credit and IT departments of
Antwerp, Dublin, Frankfurt, Hong Kong,
London, Milan, Paris, Sydney and Utrecht
branches for their invaluable support and
to all the Capital Markets Sales teams for
their efforts in selling the bonds.
