China Banking Regulatory Commission, Guidelines for the Syndicated Loan Business

中国银行业监督管理委员会银团贷款业务指引

November 02, 2007 | BY

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China promotes syndicated loans.

Clp Reference: 3600/07.08.11 Promulgated: 2007-08-11 Effective: 2007-08-11

Issued: August 11 2007
Effective: As of date of issuance

Interpreting Authority: China Banking Regulatory Commission

Applicability: These Guidelines shall apply to banks and non-bank financial institutions that are established within the territory of China with the approval of the China Banking Regulatory Commission and that engage in loan business (Article 2).

The term "syndicated loan" means the business whereby two or more banks extend a renminbi or foreign currency denominated loan or credit to a borrower via the agent bank at the specified time and in the specified percentages based on the same loan terms and conditions and pursuant to the same loan agreement (Article 3).

Main Contents: The use of a syndicated loan is encouraged for large loans characterized by any of the following circumstances:

(1) financing of a large group customer or large project or various large operating capital financings;

(2) the total financing for a single enterprise or single project exceeds 10% of the lender's capital balance;

(3) the total credit to be extended to a single group customer exceeds 15% of the lender's capital balance; or

(4) the borrower uses competitive negotiations to select banking financial institutions to finance a project.

The Guidelines specify the principal duties of the lead bank and agent bank, and the main contents of syndicated loan agreement.

Related Legislation: PRC Banking Regulation Law, Dec 27 2004 No.1 p45; PRC Commercial Banking Law (Revised), Dec 27 2003, CLP 2004 No.1 p.4 & May 10 1995, CLP 1995 No.5 p.32; PRC Contract Law, Mar 15 1999, CLP 1999 No.4 p.19; and PRC Security Law, Jun 30 1995, CLP 1995 No.6 p.21

Full Translation: See page 29

clp reference:3600/07.08.11prc reference:银监发 [2007] 68 号promulgated:2007-08-11effective:2007-08-11

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