China National Chemical Corp. is asking bankers for more than $30 billion worth of loans to fund its $43 billion acquisition of Swiss pesticide and seed company Syngenta AG.

 

The Chinese state-owned firm, known as ChemChina, is reaching out to a clutch of global and Chinese banks for a lending package set to be completed by April, according to people familiar with the situation. It is also tapping a consortium of Chinese sovereign funds to buy stakes in the deal.

 

HSBC Holdings PLC and China Citic Bank International, which are advising ChemChina on the Syngenta acquisition, are leading the syndicated loans, the people said.

 

Chinese companies are shopping abroad at a record pace this year, cutting deals that include Haier Group’s $5.4 billion agreement to buy General Electric Co.’s appliance business and HNA Group’s $6 billion pact to buy U.S.-based technology distributorIngram Micro Inc.

 

Global banks and Chinese investors have been eager to fund such Chinese ambitions. State-owned companies like ChemChina carry the imprimatur of Beijing, meaning their creditworthiness is nearly on par with the Chinese government. Because ChemChina isn’t a publicly traded company, it can’t issue stock to public shareholders to raise cash for the deal.

 

That has created a rare opportunity for banks to write big checks for a Chinese state-owned company. For the global portion of the loan package, HSBC together with Credit Suisse Group AG, Rabobank Group and UniCredit SpA have underwritten a $20 billion bridge-loan package that they will invite other banks in Europe to join. It is split between $15 billion in facilities to pay for the all-cash offer and $5 billion to backstop existing Syngenta debt, according to a person familiar with the situation.

 

The bridge-loan package has one-year and six-month portions and is expected to close in April. Bridge loans are a form of short-term financing that is typically replaced later with bonds or longer-term debt.

 

China Citic Bank will separately launch a syndicated loan of up to $15 billion in Asia in March, one of the people said. The total amount of the loan packages could change, depending on the amount of funding ChemChina can secure from Chinese entities joining its consortium.

 

State fund China Reform Holdings Corp. has committed to joining the consortium, while the country’s state-run Silk Road Fund is also considering joining the deal, according to the person. The Silk Road Fund was set up in 2014 with $40 billion to boost links between China and countries on trade routes from Asia to Europe that have carried goods to and from China for centuries.

 

The fund took a 25% stake in a ChemChina vehicle created last year to make a $7.7 billion acquisition of Italian tire maker Pirelli & C. SpA.

 

China Reform Holdings, controlled by China’s manager of centrally owned state firms, was also part of the Chinese consortium led by China Minmetals Corp. that acquired the Las Bambas Peruvian copper project from Glencore Xstrata PLC, now called Glencore PLC, in a $5.85 billion deal two years ago.

 

ChemChina reached an all-cash deal in early February to buy Syngenta for $465 a share, plus a special dividend of five Swiss francs ($5.02) a share to be paid immediately before the deal’s closing. The acquisition still needs regulatory approval in the U.S. and Europe.

 

ChemChina is also planning a future initial public offering of the Syngenta business, and has kicked off discussions with investment bankers in Hong Kong on the planned deal. ChemChina hasn’t decided whether to list all or part of Syngenta, they said. The company is considering Hong Kong as one of the potential listing venues, according to the people.

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