China Petrochemical Corp., whose Hong Kong-listed unit is Asia’s biggest refiner, has started marketing a $2.5 billion five-year term loan in syndication, according to a statement from two of the arranging banks.
Tiptop Energy Ltd. and Sinopec Century Bright Capital Investment Ltd. are the borrowing entities and the facility is guaranteed by Sinopec Group, as the company is more commonly known, according to the statement today from United Overseas Bank Ltd. and the Royal Bank of Scotland Group Plc.
Beijing-based Sinopec posted a 20 percent increase in third-quarter profit last month, beating estimates, as higher retail fuel prices helped margins. The company continues to see steady growth in both its overseas and domestic markets and its refinery business has seen a “significant increase” in profitability this year, according to today’s statement.
“The group’s overall financial performance remains strong and is well supported by various financing channels,” Sinopec said. “We are confident this will become a landmark transaction in the syndicated loan market.”
Proceeds of the loan will be used for general corporate purposes and the facility pays a margin of 1.23 percent per annum, according to the statement.
China Construction Bank Corp., Bank of Tokyo-Mitsubishi UFJ Ltd., Citigroup Inc., HSBC Holdings Plc, Royal Bank of Scotland Group Plc and United Overseas Bank Ltd. have been hired as the facility’s mandated lead arrangers, bookrunners and underwriters, Sinopec said.
Syndicated loans in Asia-Pacific outside of Japan total $315.9 billion this year compared with $319.6 billion in the same period of 2012, according to data compiled by Bloomberg. Companies from China and Hong Kong make up three of the top 10 takers of bank debt since Dec. 31 and China National Offshore Oil Corp. leads borrowers, signing $9 billion of facilities.
Sinopec has the equivalent of about $38.9 billion in bonds and loans outstanding, Bloomberg-compiled data show.
Incorporated in Hong Kong in April 2008, Tiptop is an asset holding company of Sinopec and is wholly owned by Sinopec International Petroleum Exploration & Production Corp. Century Bright is also wholly-owned by Sinopec and, as the sole offshore treasury center of the group, serves as the platform for offshore settlement, financing and cash management, according to the statement.
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