Foreign banks committing to considerable loans

Jin Liqun, president and chair of the Asian Infrastructure Investment Bank (AIIB), announced a commitment of approximately $5 billion in preferential loans to collaborate with Vietnam. The announcement was made during Liqun’s meeting with Vietnam’s Prime Minister Pham Minh Chinh last week, and underscores the AIIB’s dedication to fostering sustainable economic growth and infrastructure development in the region.

“We are committed to supporting Vietnam’s sustainable development through efficient and impactful projects. Our experience in various Asian countries equips us well to contribute effectively to Vietnam’s infrastructure growth,” stated Liqun.

Foreign banks committing to considerable loans, Photo: aiib.org

Established in 2016 with 57 founding members including Vietnam, the AIIB has since expanded its membership to 109 markets, representing over 80 per cent of the global population and 65 per cent of GDP. To date, the bank has approved around 275 projects with total value exceeding $53.5 billion for members.

In Vietnam, the AIIB’s activities have primarily focused on the private sector, with three projects totalling $223 million. These projects include COVID-19 response support, solar energy development, hydropower, and climate-resilient infrastructure.

The bank has expressed interest in funding additional projects in Vietnam in renewable energy, transportation infrastructure, and water supply and drainage. This aligns with the AIIB’s mission to support projects that are sustainable and have a positive impact on economic growth and development.

Earlier in July, the AIIB announced investment of $75 million in green and blue bonds issued by SeABank. Vietnam’s Nationally Determined Contribution emphasises the importance of resource mobilisation from financial and international credit institutions to support climate mitigation and adaptation ambitions, said Gregory Liu, the AIIB’s global director general of Financial Institutions and Funds. “The AIIB is very pleased to work together with SeABank and the International Finance Corporation (IFC) in this innovative transaction,” he said.

The investment was facilitated through the co-investor introduction by the IFC, a strategic partner supporting SeABank in sustainable projects and financial inclusion in collaboration with the Australian government.

At the end of June, the IFC provided a financing package of $150 million, including investments in SeABank’s blue and green bonds. Together, the AIIB and the IFC are investing $150 million in these bonds, with the latter also advising SeABank on the issuance, related frameworks, and pipeline development.

In another significant financial manoeuvre, Standard Chartered announced last week that it had co-led a syndicate of banks in successfully executing a $175 million syndicated loan for Techcom Securities (TCBS).

The deal marks a milestone as it is the largest unsecured syndicated loan ever secured by a Vietnamese securities firm. Standard Chartered, along with CTBC Bank, Taipei Fubon Commercial Bank, Taishin International Bank, and KGI Bank, acted as mandated lead arrangers and book runners for this deal. The successful arrangement and execution of this loan underscore the collaborative efforts and trust among these international financial institutions.

The financing will enable TCBS to invest in infrastructure and advanced technologies such as machine learning and generative AI, positioning the firm at the forefront of technological innovation in the financial sector.

Nguyen Thi Thu Hien, CEO of TCBS, said, “Diversifying its funding sources both domestically and internationally is a strategic move for TCBS to become Vietnam’s largest wealth-tech firm in terms of equity, profitability, and operational efficiency. We plan to leverage our strong financial position to maintain optimal market conditions for customers through policies such as zero fee trading and margin loan packages.”

Previously, Techcombank secured a $200 million syndicated loan in late April, marking the bank’s fourth syndicated transaction and attracting participation from 15 international banks with a high oversubscription rate. First Abu Dhabi Bank, Landesbank Baden-Württemberg, Mizuho Bank, MUFG Bank, and OCBC fully underwrote and funded the loan upfront. Other participating banks hailed from diverse regions, including the Middle East, the Philippines, and China.

“The success of this syndicated loan reflects the market’s confidence in Techcombank’s robust capital and income position, even amid a prolonged economic slowdown and domestic market challenges,” stated a Techcombank spokesperson.

Previously, the largest syndicated loan the bank secured was valued at $800 million, which took place at the end of 2021. In that transaction, 28 international banks and financial institutions participated in providing the loan.

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