The 3 megabanks, led by MUFG Bank, are in final discussions to refrain from participating in the syndicated loan to finance construction of GlobalFoundries' factory, the subject of the third round of investment in the United States. JBIC and foreign banks are expected to provide the funding, increasing the burden of raising dollars.
The 3 megabanks, including MUFG Bank, are entering final discussions on not participating in the syndicated loan for GlobalFoundries' factory construction project, which was selected as the third round of lending for investment in the United States. Funding is expected to be provided by the Japan Bank for International Cooperation (JBIC) and foreign banks, with the private-sector portion expected to be covered by insurance from Nippon Export and Investment Insurance (NEXI).
Because the loans for investment in the United States are denominated in dollars, there is a view that the burden on Japanese banks of raising foreign currency could have a significant impact. In the first round, JBIC and the 3 megabanks provided syndicated loans, while in the second round JBIC and US financial institutions supplied the funding.
The total value of the third round of investment in the United States is expected to reach as much as $21 billion, underscoring once again the scale of the factory construction project. Attention will remain focused on how the funding structure will take shape.