After expanding to Europe and setting up its European headquarters in Luxembourg in 2013, CCB has been steadily growing, with branches now in Paris, Amsterdam, Barcelona, Milan, Warsaw and Budapest. Although CCB is the second-largest bank in the world in terms of total assets on its balance sheet, its presence in Europe has been rather quiet.
Recently, the bank closed a landmark deal that demonstrates its ability to make the same sort of large-scale transactions in Europe as it does in China.
A landmark deal
The deal was a €440-million syndication loan with a consortium of international banks led by CCB. The recipient of the loan is Belgium-based Warehouses De Pauw (WDP), a listed company that invests exclusively in European warehouses, mainly in the Benelux region but also in France, Germany, and in one CEE country, Romania.
With a portfolio of nearly €7 billion, WDP already has a strong presence in Luxembourg as the majority (55%) owner of the logistics hub in Bettembourg (the Luxembourg state owns the remainder). This was the first time CCB had been mandated by a European company to lead an international syndicate of lenders. Despite the challenging market conditions, CCB structured the deal and was able to bring in other banks, proving it has earned a place in European corporate finance.
We are committed to promoting green finance, serving our clients and working with other players to create a syndication market here in Luxembourg.
A commitment to ESG
WDP prioritizes ESG, which is why the company took out a green loan based on its Green Finance Framework. This framework provides criteria that enable investments in renewables as well as energy-efficient and other environmentally friendly projects that support the reduction of carbon emissions. The ESG elements of the loan agreement were also important for CCB in moving towards its investment targets, which support the decarbonisation of the European economy.
For WDP, the financing will be used to undertake a number of green projects such as constructing more energy-efficient buildings, adopting renewable energy and shifting toward clean transportation. For instance, a part of the funds has been dedicated to the installation of photovoltaic solar panels on the roofs of WDP warehouses, something that will set the company apart from its competitors. It is also in the process of moving to a primarily hybrid or electrical fleet which will drastically reduce the company’s carbon footprint.
Benefits of working with CCB
Accessibility
Access to the Chinese yuan, a banking network and an international payment system
Chinese bonds
Entry into Chinese financial infrastructure such as the China Interbank Bond Market and Panda bonds
Expertise
Transaction expertise in sectors such as energy, telecommunications, manufacturing and real estate
Financing
Potential of benefitting from project financing facilities and short-term bridge financing facilities
What CCB brings to Luxembourg
CCB has tremendous experience in structuring large international deals outside of Europe, and it is now transitioning to become more involved in major transactions within the continent. The bank’s strategy consists of providing clients with professional services and banking solutions to raise funding, not just from CCB, but from the entire market. The bank has a successful track record of structuring large, strategic deals in sectors such as energy, telecommunications, manufacturing and real estate – as well as project and bridge financing facilities.
A vision of Luxembourg as a syndication market center
Junle Xie, General Manager at CCB, sees great potential for the bank in Luxembourg and believes that CCB brings real added value to the corporate finance ecosystem. But he also sees great potential for Luxembourg. “We see many opportunities for the whole banking industry in Luxembourg, and we believe that, by working together with other local players and the government, we can develop a real syndication market here,” he explained. Such a development will not happen overnight, he says, but rather “deal by deal.” Already, CCB feels very much at home in the local ecosystem. “We have had very positive experiences with all the players on the market, law firms as well as Big Four firms,” he said.
CCB at a glance
1954
The year China Construction Bank was established
No. 2
Ranking worldwide in terms of total assets
USD 4.8 trillion
Amount of assets on its balance sheet
2013
The year the bank has set up its European hub in Luxembourg
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