HSBC
Many of the big cross-border financing deals HSBC does for its big corporate customers in southeast Asia should come with the letters ‘BRI’ pre-stamped on them. The bank is a powerhouse in the region, but more importantly, its sophisticated financial expertise so often seems to match and overlap, with eerie precision, exactly what China is trying to do with BRI.
Take the 220-kilometre, high-speed rail project linking Bangkok’s two big airports, Don Mueang and Suvarnabhumi, with U-Tapao airport in the coastal city of Pattaya. Costing an estimated $7 billion, the project is spearheaded by Thailand’s CP Group and includes China Railway Construction, Siemens, Japanese public finance institution JBIC and two more mainland firms, Citic Group and China Resources.
The project is huge – and it is integral to the long-term dream of linking China with southeast Asia overland and by high-speed rail in the 2020s. HSBC is financial adviser to a project that will cut travel times between the three airports to just one hour.
Another transaction that stands out here is the $1.1 billion refinancing of Mong Duong 2, the largest coal-fired power plant in Vietnam. In August 2019, Mong Duong 2 refinanced its existing senior debt facilities with a 3.8-year, amortising senior secured term loan, and a 9.8-year, amortising senior secured project bond.
The net result was a big reduction in interest costs for a 1,242-megawatt plant owned by AES Corporation, Posco Energy and China Investment Corporation, the sovereign wealth fund that manages part of China’s foreign exchange reserves.
HSBC acted as sole financial adviser, joint global coordinator, sole ratings adviser and mandated lead arranger on a complex deal that also marked the largest private-sector power project in Vietnam since the plant began operations, back in 2015.