Deutsche Bank China issues first overseas yuan-oriented loan in LatAm market
Deutsche Bank China has cooperated with Brazil-based Sao Simao Co - a subsidiary of China's State Power Investment Corporation (SPIC) - to complete the first yuan-oriented loan offering in the Latin America market, with the issuance of 400 million yuan ($54.77 million) in short-term loans to overseas clients, Shanghai Securities News reported on Friday.
The loans provide a new option for enterprises' overseas financing, and also mark a new milestone in the yuan's internationalization in the Latin American market, said Yin Zhen, a representative of Deutsche Bank China.
The Sao Simao financing project adopts domestic yuan financing and a cross-currency swap transaction structure for the yuan and Brazil's real to lock in the interest rate of the real loan. As the only foreign-backed bank in the project, Deutsche Bank China cooperated with its branches in Brazil, the US, London, Singapore and Hong Kong. It also leveraged its global liquidity support and pricing advantages to meet clients' need for exchange rate control.
Representatives from SPIC said the project marked deepened application of the yuan in the Latin American market, and will allow China-backed overseas enterprises to explore internationalization of the yuan and further progress in the Belt and Road Initiative.
Meanwhile, the Ministry of Economy of Argentina announced on Tuesday that it will again use yuan to repay part of its IMF debt.
According to the ministry, it will repay about $3.4 billion in foreign debt and interest due to the IMF in the near future, part of which will be paid with the equivalent value in yuan under a bilateral currency swap agreement between the central banks of the two countries.
Experts said the decision showed Argentina's confidence in the Chinese economy and its recognition of the stability and value of the Chinese currency.
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