China leveraged loans face new hurdle from EU M&A rule
The European Union’s plans to screen foreign direct investment more closely could present another obstacle for Asian loans bankers when it comes to leveraged deals and acquisition financing.
By Pan Yue
China’s firms already face trouble from tensions between China’s president Xi Jinping and US counterpart, Donald Trump
A decision by the European Parliament, the European Council and the European Commission to scrutinize foreign investments more closely for national security reasons has rattled financiers in China.
While a joint statement in November did not explicitly mention any countries, bankers and lawyers reckon the rules are directed against acquisitive Chinese companies; these already face difficulties investing in the US thanks to tensions between US president Donald Trump and his Chinese counterpart Xi Jinping.
The EU framework is quite straightforward: it requires member states to report to the Commission acquisition deals that might be considered to cover critical infrastructure or technologies, or deals covering security of supply or access to sensitive information.