A Consortium of 11 Banks Offers a Syndicated Loan to Hengs Technology in Support of Green Finance 〔Economic Daily News〕
2017/11/23
Green energy development is a key policy goal and banks actively promote green finance. Hengs Technology is the first domestic solar power system provider to acquire the German certification for solar power facilities. The company took out a syndicated loan exceeding NT$ 1.2 billion. A total of 11 banks agreed to offer a total loan which exceeded the originally requested amount by almost 100%. The loan agreement was signed in Tainan on the 23rd.
The syndicated loan which was organized by Taiwan Business Bank is a debt restructuring loan. The loan amount offered by the banks reached NT$ 1.71 billion exceeding the originally requested amount of NT$ 950 million by almost 100 % (both sides finally settled on 1.235 billion). In addition to Taiwan Business Bank, which served as the main organizer, 10 other banks participated in the loan syndication (Bank of Taiwan, Hua Nan Bank, Chang Hwa Bank, Taiwan Cooperative Bank, Agricultural Bank of Taiwan, Cathay United Bank, Yuanta Commercial Bank, Taichung Commercial Bank, Bank of Panhsin, and Bank of Kaohsiung). This clearly shows the commitment of local banks to green financing services.
It is reported that the interest rate for the syndicated lies between 2% and 3%, which is slightly higher than the lowest rate of 1.7% tacitly agreed upon on the syndicated loan market and represents a favorable margin. In addition, solar power generation creates stable cash flows and no large investments are required, which makes it easier for banks to maintain a grasp of the risks of credit extension. A total of 11 medium and large Banks therefore actively participated in loan syndication. This is a clear indicator for the thirst of banks for good loans.
Mr. Can-Huang Zhou, President of Taiwan Business Bank points out that Hengs Technology is a provider of solar power systems with a long history. The company focuses on the provision of one-stop solutions in the field of solar power plants. Since the company realized early on that power plant operations and management (O&M) determine whether its long-term profits can meet the expectations of investors, it became the first EPC business in Taiwan to acquire an O&M certification issued by the German TÜV Rheinland. Banks are very optimistic about the prospects of the company and therefore actively participated in loan syndication.