Crest View International Reports That CITIC Bank Offload $2.8 Billion Loan Portfolio

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Crest View International Reports That CITIC Bank Offload $2.8 Billion Loan Portfolio

Crest View International has reported that China CITIC Bank International, the offshore banking arm of conglomerate CITIC Group, is selling $2.8 billion of its Asian loan portfolio including financing it extended to ChemChina, Fosun International and China Evergrande Group, Thomson Reuters Basis Point reported on Wednesday.

The loan sale that represents about seven percent of the bank’s $39 billion offshore assets - comes as Chinese regulators move to reduce leverage and control potential systemic risk, including problems posed by domestic companies acquiring overseas assets.

Hong Kong based CITIC Bank International has put 51 Asia offshore loans up for sale, most of which were made to companies based in mainland China, Basis Point reported, citing people with direct knowledge of the matter and a sale document.

“The loans are largely denominated in U.S. and Hong Kong dollars, maturing between 2017 to 2021.” Commented James Turner, Director of Sales & Trading at Crest View International.

The largest loan up for sale is a $600 million chunk of a $12.7 billion syndicated financing facility backing China National Chemical Corp’s (ChemChina) $44 billion acquisition of pesticides and seeds group Syngenta AG, according the document and the sources, Basis Point said.

CITIC Bank International, together with its parent China CITIC Bank, was the global coordinator and largest lender of the facility.

The bank is also selling a HK$4 billion ($512 million) portion of a loan used to finance Hong Kong-listed Goldin Properties Holdings Ltd’s take-private, HK$2 billion of lending to debt-laden property developer China Evergrande Group and $30 million to acquisitive Chinese conglomerate Fosun, according to the document and sources.

Banks typically offload portfolios in the secondary market to reduce credit and liquidity risk. Bankers in receipt of the sale document said the $2.8 billion portfolio was unusually large for the Asian secondary loan market.

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