Bothhand secures loan
Bothhand Enterprise Inc (帛漢公司), a Tainan-based electronic components manufacturer, secured a NT$600 million (US$18.2 million) syndicated loan from nine local banks yesterday, part of which will fund its mid-term operations.
Half of the three-year loan will be used to buy back Bothhand’s convertible bonds maturing in the middle of October, said a statement released by Ta Chong Bank (大眾銀行), one of the syndicated loan’s four leading banks.
Ta Chong, however, refused to reveal the loan’s interest rates.
In a vote of confidence on the company’s management, the loan’s nine lenders over-subscribed the loan by NT$90 million, or 15 percent, but Bothhand rejected the additional funds.
Banks ratings lowered
Taiwan Ratings Corp (中華信評) lowered its ratings on five banks yesterday, including Cosmos Bank (萬泰銀行), Cota Commercial Bank (三信商銀), Hwatai Bank (華泰銀行), Bank of Panhsin (板信銀行) and Union Bank of Taiwan (聯邦銀行) with a negative outlook on their weakening profitability.
The negative outlook reflects Taiwan Ratings’ expectation that the five banks’ core earning capability will remain mediocre over the next wo years and a potential surge in credit costs amid the current economic downturn is likely to constrain their profitability and capitalization, the rating agency said in a statement.
Bota and Hwatai’s adequate capitalization and risk management are likely to provide a buffer to absorb a modest level of financial volatility, the statement said.
Union Bank’s incremental credit costs and legacy problem will hinder its efforts to improve its net profit to a satisfactory level, even though its earnings before loan loss provisioning was likely to remain above the industry average, Taiwan Ratings said.
Union Bank’s capitalization, however, indicated by the ratio of adjusted total equity to adjusted assets, of 2.5 percent at the end of March, will only provide a mediocre level of buffer against financial volatility, the agency said.
Taiwan Ratings may lower its ratings if the banks’ deterioration of asset quality and profitability goes beyond expectation and hurts their capitalization.
Once the five banks prove they can maintain a stable earnings profile, asset quality and capitalization, Taiwan Ratings revise the outlook back to stable, the statement said.
FDI in China fell 17.8%
Foreign direct investment in China dropped 17.8 percent year-on-year last month for the eighth straight monthly fall, the Ministry of Foreign Trade and Economic Cooperation said yesterday.
China attracted a total of US$6.38 billion of foreign investment last month, ministry spokesman Yao Jian (姚堅) told reporters in Beijing.
The decline compared with a fall of 22.5 percent in April from the same period last month, previously released statistics showed.
Foreign direct investment in the first five months was down 20.4 percent from the same period last year to US$34.05 billion, Yao said.
NT dollar stable: central bank
The New Taiwan dollar is “relatively stable,” the central bank said today, after the currency weakened 0.4 percent against its US counterpart.
“The US dollar appreciated against major currencies today,” the bank said in a faxed statement, adding that the South Korean won posted a bigger decline than the local unit.
The won fell 0.6 percent yesterday.
The NT dollar dropped 0.4 percent to close at NT$32.94 against the greenback on turnover of US$973 million.
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