Bank of China Hong Kong has become the first mainland-backed bank to lend to an overseas-based Taiwanese company in an effort to enhance its asset quality. The bank has granted a loan of US$70 million - part of a syndicated loan of US$1.2 billion - to the United States operations of the Taiwanese-invested Formosa Plastics. Formosa Plastics, owned by Taiwanese plastics tycoon Wang Yung-ching, has established shops in the mainland, Taiwan and the United States. US-based Citibank has signed up lenders for US$350 million of the syndicated loan, while the mainland-based Bank of Communications will finalise its contribution for the remaining US$850 million soon, according to news Web site Homeway. The US$350 million portion was arranged by Citibank, Bank of America and Bank of China Hong Kong, which will mature in two years. Formosa Plastics in the US raised the loan for working capital after it postponed a listing on a stock market. Analysts said the Bank of China Hong Kong's involvement may reflect the mainland bank's tendency to increase lending to quality firms rather than only adhering to policy lending to the mainland's state-owned enterprises.