National Housing and Urban Regeneration Center (HURC) of Taiwan closed the largest syndicated loan. The total was around NT$411.9bn. Previously, the institution drew big ticket commitments directly from nine state-owned lenders. Bank of Taiwan is the sole mandated lead arranger as well as the book runner covering the total of NT$200bn. This is actually almost 49% of the facility. Meanwhile, the eight participants are originally from the commitments from NT$23bn to NT$46bn.
This transaction runs around a month. It finally attracted public sector banks interested in supporting the government’s large-scale social housing initiative. On the other hand, there are no private banks joining the transaction. A Taipei-based loan banker knowing the transaction argued that the borrower limited the lending group to the state-owned bank. This reflects the borrower as the government executive body. In addition the scenario does not seem to fit the private banks. This is because the loan tenor is long and the pricing is low. Thus, the private banks might see risks looming on the return expectations.
Actually, nine lenders joining HURC transactions have a similar financing scenario with NT$382bn loan. This was for the Taiwan High Speed Rail Corp. The firm was the previous holder of Taiwan’s largest syndicated loan back in January 2010. The lead arranger of this loan was also from Taiwan’s largest lender Bank of Taiwan. They could draw around seven state-owned banks in general syndication.
Meanwhile, the exposure took Bank of Taiwan around 19% of the 2010 loan. Others covered around 7% to 18%. Furthermore, HURC loans have supported Taiwan’s first half syndicated loans volumes for around 139%. The total of this volume would be $34.66bn. This most recent loan helped to fund the construction of around 69.000 social housing units. Plus, it also helps the refinancing of the existing debts. Basically, this social housing units are under Taiwan’s government programmes.
