UPDATE 2-Hang Seng extends yuan loan in HK as RMB trade expands

* China Automation takes $50 mln syndicated loan

* Hang Seng, ANZ, Bank of East Asia taking part in loan

* Galaxy Ent begins roadshow for $150 mln yuan bond

* BAML, HSBC, UBS, BOCI joint bookrunners for Galaxy bond

* Coincides with mainland yuan trade settlement expansion

(Adds yuan trade settlement expansion)

HONG KONG, Dec 7 (BestGrowthStock) – Hang Seng Bank and
nine other banks extended the first yuan syndicated loan in
Hong Kong’s fast-growing offshore market on Tuesday, opening
more avenues for finance using the Chinese currency.

The move coincided with an announcement by the People’s
Bank of China on Monday that the number of companies that can
settle trade in yuan had increased 200-fold to 67,359 from
365, effective Dec. 3, a major expansion that reflected
China’s growing confidence in the cross-border yuan settlement
scheme. ID:nTOE6B506K]

China Automation took out the $50 million, 3.5
year multi-currency loan facility with the group of banks.

The size of the syndicated loan was also bulked up to $50
million from the original $40 million following a strong
response from the supporting banks, the two companies said in
a statement.

“This fundraising exercise will be partly used to improve
our liquidity, and also to pay for acquisitions on the Chinese
mainland,” said Richard Xuan, chairman of the China Automation
Group.

The annual interest rate for the 50 million yuan part of
the facility will be set at the Hang Seng Renminbi prime rate
plus 1.35 percentage points, while the $40 million and HK$22
million parts of the loan will be charged at 2.85 percent age
points over the London Interbank Offered Rate (LIBOR) and Hong
Kong Interbank Offered Rate (HIBOR), respectively.

Other banks that took part in the loan syndicate include
ANZ bank , Hua Nan Commercial Bank, Allied Banking
Corp, Bank Negara Indonesia, Bank of East Asia , Far
Eastern International Bank, Industrial Bank of Taiwan, Taiwan
Business Bank and the Shanghai Commercial and Savings Bank.

Separately, casino operator Galaxy has started a
roadshow to gauge investor appetite for a 3-year, 1 billion
yuan bond in Singapore, Thomson Reuters publication IFR
reported on Tuesday.

Bank of America Merrill Lynch , Bank of China
International, HSBC and UBS are
bookrunners for the deal, and they have made an application to
the Hong Kong exchange for the yuan-denominated bond to be
listed there.

A sustained pick-up in yuan trade settlements and rising
yuan deposits in Hong Kong is spurring the development of a
full-fledged currency market, after China eased restrictions
allowing the currency to be traded more freely in the territory.

A lopsided loan-to-deposit ratio has emerged in Hong Kong
due to strong investor interest in yuan deposits, but the lack
of investment options for banks means they have few investment
options with the money.
(Reporting by Kelvin Soh; Editing by David Chance and Ken
Wills)

UPDATE 2-Hang Seng extends yuan loan in HK as RMB trade expands