New Zealand part of ‘tidal wave’ of borrowing

Press, 22 January 1982, Page 14

New Zealand part of ‘tidal wave’ of borrowing

PA Hong Kong New Zealand took part in “a tidal wave” of Asian loan sydications during 1981 by borrowing 5914.5 M in five syndicated loans, according to “Asian Finance” magazine.

In its yearly survey of syndications, the Hong Kongbased magazine says that 138 banks . from all over the world took lead or co-lead positions in 213 deals, to lend a total of $22,751M to Asian and Australasian borrowers. “In the frenetic milieu that kept loans managers constantly hurtling around the region, almost one deal was being signed every other day," it reports. “In Asia, it has never been so.” The momentum had, however, slowed during the second half of the year — when deals not completed included a S6ISM sydicated loan for New Zealand synthetic fuels. The year's total borrowings compared with $15.832.5M in 1980. The region’s heaviest borrower was South Korea with 42 loans totalling $4531M or 19.9 per cent. Then came Australia: $3656.4M from 12 syndications: Hong Kong: $3247.7M from 41, and Malaysia: SIBOOM from nine.

New Zealand is listed eighth on the list, its $914.5M of sydnicated loans representing 4.02 per cent of the total, fractionally more than the amount raised by Thailand.

The magazine lists a $430.5M loan to the Petroleum Corporation of New Zealand and a S26BM loan to Air New Zealand among major syndications arranged for New Zealand borrowers.

Although the American banks had held undisputed sway on the market, a significant development had been the emergence of Arab banks.

Borrowers had enjoyed a great deal of advantage in a competitive environment. “Banks lent at low profit even though their costs of operation were soaring." the magazine reports. “Ten year maturities tended to become a matter of routine, and spreads were frequently down to 0.375 per cent.

“Even better, the Petroleum Corporation of New Zealand. China Air Lines (Taiwan), and Korea Electric got 0.25 per cent for 10 years, which only indicated the way things were going and would continue to go as long as banks are flush with cash.”

Malaysia is described as the country in the region to show the most remarkable “borrowing clout." and there were further indications that bankers were warming to Indonesia.

The largest syndication reported was $1722M to Woodside Petroleum in Australia for its northwest shelf project.