New Silk Road Finance Awards 2019: Southeast Asia
Best regional bank for BRI: DBS
DBS’s importance to the Belt and Road Initiative becomes more apparent every year. Over the last 12 months, the Singapore-based lender provided financial advice and services to five projects backed by mainland corporates in three BRI countries.
|Lim Wee Seng, DBS
At the head of the deal list is the construction of a new container terminal at Khalifa Port in the UAE, to be owned by Abu Dhabi Ports Company and China Cosco Shipping.
DBS is mandated lead arranger and structuring bank on a $260 million term loan facility, structured as a 15-year limited recourse financing. The bank also acted as joint global coordinator on ICBC Singapore’s triple-currency $2.2 billion green bond in April 2019, the first of its kind issued by the Chinese bank, with the proceeds to be used for financing green BRI projects.
Under Lim Wee Seng, global head of project finance, DBS has been busy across the region, supporting and funding $5.2 billion worth of BRI deals. The list includes project finance for the following: China Datang Group’s $550 million, Sinosure-supported coal-fired power plant in Indonesia; Shenzhen Energy Group and Sinohydro Corporation’s $800 million hydroelectric power plant in Papua New Guinea; and China Hongqiao Group’s alumina refinery in Indonesia, with a projected build cost of $1 billion.
DBS’s arrival as a staunch member of the international BRI banking community is no accident. The Singapore lender has been steadily expanding its presence in mainland China, where it employs 12 infrastructure bankers in Beijing alone, including four dedicated purely to project finance. It also boasts project finance teams in Singapore and Vietnam, and has 12 onshore branches in China.
The bank’s ability to strategise and plan for a future in which it is widely viewed as a pan-Asian lender with a global presence is underscored by the two memoranda of understanding it has signed with China Development Bank and Sinosure.
Best Chinese bank in the region for BRI: ICBC (Asia)
This award, while hotly contested, only really had possible one winner. Under its chairman, Gao Ming, Hong Kong-based ICBC (Asia) – which is a subsidiary of Industrial and Commercial Bank of China – has become a regional powerhouse in syndicated lending in a remarkably short space of time.
|Gao Ming, ICBC Asia
Its financial muscle enabled it to extend a mix of term loans and syndicated loans to a number of projects and corporates scattered across southeast Asia over the last 12 months.
Pick of the bunch were: a $100 million syndicated loan disbursed to Xian-based mono-crystalline solar panel maker Longi, to expand its manufacturing base in the Sama Jaya Industrial Zone in Sarawak; a $65 million syndicated loan disbursed to Indonesian group Astra International; and a $50 million syndicated loan channelled to Indonesian state power producer PLN.
Over the last 12 months, ICBC (Asia) has extended $263 million in term and syndicated loans to half a dozen of southeast Asia’s leading corporates, including the Manila-based conglomerate San Miguel Corporation, with a clear focus on deals that span the food, power, oil and gas, and manufacturing sectors.
The Hong Kong-based but China-controlled financial institution is also exploring the softer aspects of financial and corporate development, hosting a BRI forum in Hong Kong that attracted corporate clients and government officials from across Greater China and the Asean region.
Best international bank in the region for BRI: Standard Chartered
No one in southeast Asia can hold a candle to Standard Chartered, the only international bank present in all 10 Asean markets, and with a history in the region that stretches back 150 years.
When the UK lender calls itself a “natural fit with the Belt and Road Initiative”, it is neither misleading nor hyperbolic. Over the last 12 months, the bank has held BRI-themed events in Singapore, Indonesia, Malaysia and Brunei, and struck memoranda of understanding with Export-Import Bank of China and China Export & Credit Insurance Corporation, also known as Sinosure.
Its deal list alone over the last year justifies its self-billing, just as it did last year, and the year before that. In February 2019, it was mandated by China Energy Engineering Corporation as the sole structuring and financing bank on a 257-megawatt solar power project in Vietnam. It is providing a full range of services to the Beijing energy conglomerate, including foreign exchange, payments and collections, and trade receivables discounting.
In June 2019, StanChart was mandated to arrange $43 million in financing to support local dealer financing in Indonesia for SGMW, a joint venture between Chinese automaker SAIC and General Motors.
In December 2018, the bank set up a facility in Indonesia to support the working capital needs of Mengniu Dairy, China’s second-largest maker of dairy products.
Best local bank in the region for BRI: Siam Commercial Bank
Siam Commercial Bank has built strong and sturdy links with Chinese lenders and corporates, working hard to ensure it is a key conduit in bilateral trade in general, and in local BRI deals.
|Manop Sangiambut, Siam Commercial Bank
The Bangkok lender, notes Manop Sangiambut, executive vice-president of SCB’s China business function, is central to several deals that reinforce the sense that Thailand stands to benefit as production shifts out of China and into lower-cost southeast Asian states with good infrastructure.
Over the last year, SCB has been at the heart of two inward FDI deals, financing the construction of a $170 million solar panel factory for China’s Canadian Solar, and a $30 million high-tech agricultural plant for Shanghai-based Soron Biotechnology.
SCB’s fully licensed branches in Hong Kong and Shanghai – the latter opened for business in the middle of 2018 – and its representative office in Beijing, helped to facilitate $12.4 billion in Sino-Thai trade during 2018, and $4.7 billion in the first five months of this year.
A $50 million venture capital fund, formed by SCB in 2018 with the aim of putting capital to work in Chinese fintechs and fintech funds, has been busy from the start. So far, it has put its money to work in two mainland fintech funds, Huaxing Growth Capital and Lingfeng Capital, with a mandate to invest in projects that offer long-term strategic benefits rather than pure financial returns. It has also invested in Beijing-based fintech platform Abakus Technology, with the aim of exporting its Wecash- branded consumer financing model to Thailand and the rest of southeast Asia.
SCB has also been willing to think outside the box. In addition to, in its own words, getting its “hands dirty” by investing directly in Chinese unicorns, the bank says it is also “experimenting [in] something unconventional” for commercial banks: it is building a cross-border e-commerce platform to sell Thai products straight to Chinese consumers. Earlier this year, the bank opened its first branded SCB Online Shop on JD.com’s online market place, JD Worldwide.
Best bank for BRI-related financing in the region: Maybank
Maybank has been consistently successful at inserting itself into local and regional BRI deals.
|Gregory Seow, Maybank Group
The Kuala Lumpur-based lender operates China coverage desks in the Malaysian capital, as well as in Singapore and Indonesia, to cater to the offshore needs of Chinese companies. It also has branches in Beijing, Kunming, Shanghai, Shenzhen and Hong Kong, with a clear focus on facilitating cross-border financing, trade and investment for Asean and Greater China-based conglomerates, financial institutions and state-owned firms.
Over the last year, the Malaysian lender, whose team includes Gregory Seow, chief executive of Greater China operations and global head of financial institutions at Maybank Group, has organized and hosted several bilateral and regional dinners, events and forums, including Invest Asia (held in London in June 2018), Invest Malaysia, co-hosted with Bursa Malaysia in March 2019, and Invest Asean, in alliance with ICBC International.
Perhaps the key event over the last year for the bank was its sale of Rmb2 billion ($283 million) worth of panda bonds, a blend of one-year and three-year notes underwritten by China Development Bank, BNP Paribas, HSBC and Industrial and Commercial Bank of China. It marked Maybank’s second renminbi-denominated print in two years.
The proceeds, it says, will be used to support and fund BRI projects, in sectors from utilities and mining to oil and gas and petrochemicals.
A member of the Belt and Road Bankers Roundtable, Maybank was also joint lead manager and joint bookrunner on ICBC Singapore’s inaugural $2.2 billion green bond this April, with the aim of supporting the development of a greener BRI.
The bank has also been at the heart of a number of corporate-led transactions and investments. It was sole financier on a $68 million warehousing facility, to be built in Singapore by Jurong Island Chemical Logistics, part of China Ocean Shipping Company.
The bank also provided financing, cash management and broking services to Changsha-based Huatian Industry, during its RM1.82 billion ($435 million) takeover of Malaysian semiconductor assembly firm Unisem, finalized in January.
Best bank for infrastructure/project finance in the region: HSBC
When awards like these are being handed out, HSBC should, just by dint of its long history and presence in China and southeast Asia, be a perennial contender. Yet any lender, whatever its size and history, still has to do the legwork, a fact that the UK-based bank knows full well.
It is a worthy winner of this award, having been at front and centre of several BRI deals over the last 12 months. A standout example was a $69 million Sinosure-supported facility for Longi Green Energy Technology Company, a leading Chinese photovoltaics firm busy expanding its presence in the Malaysian state of Sarawak.
HSBC was mandated lead arranger, sole lender, agent and security agent on the deal.
It was also joint global coordinator on ICBC Singapore’s inaugural $2.2 billion green bond. The multi-currency print, finalized in April, raised $900 million, €500 million and Rmb1 billion ($140 million). The proceeds will be used to fund green BRI projects, particularly in renewable energy, wastewater management and low-emission transport.