Sinopec Boosts Loan Size by 40% to $3.5 Billion on Bank Demand

China Petrochemical Corp., whose Hong Kong-listed unit is Asia’s biggest refiner, increased the size of its five-year syndicated loan to $3.5 billion from $2.5 billion after a total of 17 banks joined, according to a statement from two of the arranging lenders.

The term facility attracted banks from Asia, North America, Europe, Australia and the Middle East and pays a margin of 1.23 percent, the statement from United Overseas Bank Ltd. and the Royal Bank of Scotland Group Plc said. Tiptop Energy Ltd. and Sinopec Century Bright Capital Investment Ltd. are the borrowing entities and the facility is guaranteed by Sinopec Group, as China Petrochemical is more commonly known.

“The success of this financing is a result of strong market confidence in Sinopec Group as reflected by the involvement of global financial institutions in this landmark transaction,” Sinopec said in the statement.

The transaction makes Sinopec the eighth-biggest borrower in the Asia-Pacific region outside Japan this year, according to data compiled by Bloomberg. Lending volumes total $409.9 billion year-to-date versus $387.6 billion for the whole of 2012, the data show. Companies from China and Hong Kong comprise four of the top 10 takers of bank debt since Dec. 31 with China National Offshore Oil Corp. the no. 1 borrower, having signed $9 billion of facilities.

Beijing-based Sinopec will use the proceeds of the loan for general corporate purposes, according to the statement. Along with UOB and RBS, China Construction Bank Corp., Bank of Tokyo-Mitsubishi UFJ Ltd., Citigroup Inc. and HSBC Holdings Plc were the facility’s other mandated lead arrangers, bookrunners and underwriters, Sinopec said.

Lender List

Among the lenders, Bank of Nova Scotia, Commonwealth Bank of Australia, JPMorgan Chase & Co., National Australia Bank Ltd. and Societe Generale SA joined as mandated lead arrangers, while Royal Bank of Canada and National Bank of Abu Dhabi PJSC came in as lead arrangers.

Canadian Imperial Bank of Commerce joined as an arranger and China Merchants Bank Co. and First Gulf Bank PJSC joined as lead arrangers. Banco Bilbao Vizcaya Argentaria SA joined with the title of manager.

Sinopec has the equivalent of about $42.5 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.

(businessweek.com, edited by Topco)