China Merchants Holdings - an unlisted flagship of the Ministry of Communications - has become the latest mainland company to obtain an international credit facility, underscoring the easing of the punishing credit squeeze inflicted by banks. The US$95 million refinancing credit facility signalled the return of banks' appetite towards mainland companies, particularly those in strong financial state and with healthy balance sheets. China Merchants (Cayman) is the vehicle for the 364-day facility, which is fully guaranteed by China Merchants Holdings, parent of red chip China Merchants Holdings (International) (CMHI). The fund-raising follows similar financing deals by red chips and their parents. Top Glory Holding - the unlisted arm of state-run China National Cereals, Oils & Foodstuffs Import & Export Corp - obtained a US$70 million three-year loan on Monday. The company is the parent of red-chip Top Glory International Holdings. Cosco (Hong Kong) - controlled by the mainland's largest shipping company, China Ocean Shipping (Group) Co - received a US$75 million loan in February. Red chip China Resources Enterprise - ultimately controlled by the Ministry of Foreign Trade and Economic Co-operation - is also arranging a five-year HK$2 billion syndicated loan for corporate funding purposes, according to debt-paper database Basisfield. Mainland firms were plagued by the credit crunch brought about by the collapse of the nation's second-largest trust firm, Guangdong International Trust and Investment Corp, in 1998. It was followed by a spate of debt problems at mainland firms, led by the Guangdong provincial government's flagship investment arm in Hong Kong, Guangdong Enterprises (Holdings). A manager at one of the arranging banks for China Merchants Holdings' credit facility said the firm had been shifting some of its short-term financing to longer-term ones in the past two years. 'It shows that the company has been able to tap the longer-term financing market, as its financial position has strengthened,' he said. The manager said the resurgence of large-scale financing deals to mainland firms was a sign that 'the worst is over', after two quiet years in their lending activities. Despite banks' interest in China Merchants Holdings, its locally listed flagship, CMHI, has received mixed responses from analysts after reporting a worse than expected 10.5 per cent decline in net profit for last year. Prudential-Bache Securities analyst Martin Ching downgraded the firm's investment recommendation on the red chip from 'accumulate' to 'sell', while lowering his net profit forecast for this year by 8.8 per cent to HK$850 million. He said the forecast revision had taken into account the revised profit-sharing arrangement with its mainland partners on their investment in the Guiliu Expressway in Guangxi province. The revision came after its failure to collect HK$220 million of income guaranteed under an agreement with its mainland partners. However, BNP Prime Peregrine analyst Jim Wong has upgraded his recommendation on the counter from 'market performing' to 'outperform'. He said the firm's recent sale of half its 80 per cent in the Guiliu Expressway for HK$930 million 'has allowed it to get away from its bad asset and invest in other good projects'.