OREANDA-NEWS. March 14, 2014. By leveraging its strength in scale and risk control of syndicate financing, and extensive interbank distribution network, ICBC has successfully provided syndicate loans for a number of large projects, effectively supporting the healthy development of real economy.

Statistics show that ICBC led 323 syndicate loan projects nationwide in 2013, up by 52 from the previous year. Total amount of new syndicate loan contracts in China surpassed RMB 400 billion, including RMB 160 billion as lead manager, up by over 30% from a year earlier. ICBC also provided strong financing support to Chinese enterprises going global by leveraging its overseas network. ICBC's total outstanding international syndicate loans exceeded USD 12 billion as at the end of 2013. 

According to an ICBC executive, ICBC actively promoted its syndicate loan model to clients and peers in 2013, expanding syndicate distribution network. ICBC has arranged syndicate loans for multiple projects,including South Section of Yunnan-Guizhou Railway Project, extension of Tianjin MTR Line 6, street renovation in Honzheng County, Hongkou District, as well as Beijing Benz Automotive Co. Ltd's capacity expansion and MRA project. From infrastructure construction and revolving economy to clean energy development and advanced manufacturing, ICBC’s syndicate loans supported a large number of key projects and met financing requirement from industry transformation.ICBC has so far won the "Best Performance" award for syndicate loan business by China Banking Association for four consecutive years.

ICBC has also stepped up international syndicates by following up with outbound acquisition by Chinese companies, providing financing to multiple acquisitions covering energy, mining, machinery, food, cultural and tourism sectors, helping them capture international market and promote industrial uprade. The acquisition of Canadian oil and gas company Nexen by CNOOC and the Wuhan Iron and Steel's  acquisition of Germany’s Thyssenkrupp Tailored Blanks (which manufactures laser-welded, lightweight steel for the automotive industry) were listed as the Ministry of Commerce's 2013 China Top 15 overseas investments, M&A.

Syndicate loan is a loan or credit facility provided by numerous banks or other financial institutions with loan business license to the same borrower based on the same loan terms under the same agreement. Compared with conventional bilateral loans, syndicate loans have strong implication in addressing the defects of bilateral loans. Through syndication, each bank can assess the risk profile of the borrower and discuss with other lenders, eliminating information asymmetry and mitigating lending risk through a multi-lateral review, balancing and supervision mechanism. In addition, syndicate loans generally reflect the dynamics of borrower’s funding requirement and bank’s funding supply, which is beneficial for loan rates to be determined by market. For the borrower, syndicate loans may also shorten financing time and cost by skipping negotiation with individual banks.