Sinotruk (Hong Kong) Ltd. signed a 1.8 billion yuan ($286 million) offshore loan in Hong Kong as China expands its use of cross-border lending, spokesman Chi Lei said.
The heavy truck manufacturer based in China’s northeast Shandong Province will repatriate proceeds from the so-called Dim Sum loan, Chi, the head of investor relations at the company, said in a telephone interview today.
China is boosting use of its currency overseas and allowing more companies to access yuan in Hong Kong. Financial institutions in the city, restricted from buying mainland assets, are prepared to lend the currency more cheaply than their onshore counterparts, Chi said.
The southern city of Shenzhen passed measures yesterday to allow cross-border yuan lending with Hong Kong, the official Xinhua News Agency reported today.
The Sinotruck loan is the largest amount of yuan to be brought back to China as foreign direct investment this year in the province of Shandong, according to a statement on the company’s website.
Bank of China Ltd. (Hong Kong) arranged the loan, Chi said. The facility will mature in two years and the“cost is lower than the domestic bank lending rate,” according to the statement.
— With assistance by Henry Sanderson