Pou Chen Corp, the world's largest maker of sports shoes, has signed a contract for NT$3.5bn worth of syndicated loans with a banking group led by Citibank. The loans will be used to retire the shoemaker's previous loans and to improve its financial structure, company officials said.

The financing package includes a NT$2.8bn portion of direct loans from a group of 15 banking institutions and a NT$700m note issuance facility under which Pou Chen will be allowed to issue commercial papers to raise funds with guarantees from banks.

The shoemaker originally required NT$2bn worth of financing but decided to expand the amount to NT$3.5bn due to over subscription from the participating banks.

The three-year loans carry an interest rate based on the average prime lending rates offered by First Commercial Bank, Chang Hwa Bank and Hua Nan Bank minus 1.13 per cent, the officials said.