Exclusive: UBS was mystery lender for Thai group's Ping An deal - sources

Fri Apr 5, 2013 7:00am EDT
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By Michael Flaherty, Elzio Barreto and Denny Thomas

HONG KONG (Reuters) - The mystery lender behind a Thai billionaire's $9.4 billion purchase of a stake in China's No.2 insurer was UBS, which offered the region's fourth largest bridge loan ever and a complex financing package known to only a few involved, people with knowledge of the matter told Reuters.

The Swiss bank's financial backing for the biggest foreign purchase of Chinese stock explains how a Thai conglomerate scraped together $7.4 billion in cash for the deal's final payment, after its main lender backed out at the 11th hour.

The rescue role the bank played in CP Group's acquisition of HSBC's 15.6 percent stake in Ping An Insurance Group Co of China was not disclosed by the companies.

People with direct knowledge say that UBS AG backed the deal with two financing facilities, the major piece being a five year, roughly $5.5 billion loan.

The short term facility was a bridge loan that was replaced by longer term financing, the people say. At $5.5 billion, the short term facility would have been the fourth largest Asia Pacific bridge loan on record, according to Thomson Reuters data.

For the help it provided, UBS is set to earn another milestone. People familiar with the matter say the bank is expected to reap, over time, about $100 million in arranging fees alone, a massive amount for one bank on a single deal.

In estimated fee terms, that is more than Deutsche Bank earned from four investment banking divisions in Asia-Pacific in the first quarter of 2013, according to estimates by Thomson Reuters/Freeman Consulting.

Such an extraordinary arrangement with a prized client, Thai billionaire Dhanin Chearavanont, is both a rare move for UBS and signals a key shift in strategy for the bank.   Continued...

The logo of Swiss bank UBS is seen on a building in Zurich, February 13, 2013. REUTERS/Michael Buholzer