Bank of China contributes to a €2.835 billion EUR revolving credit facility tranche of a £7.7 billion GBP syndicated loan to Imperial Tobacco for refinancing and working capital purposes (Linked to Record ID#100227, #100251, #100252, #100253, #100255, #100256, #100257, #100258, #100259, and #100260)

Project narrative

On July 15, 2014, a syndicate of 17 banks — including the Bank of China (BOC) — entered into a £7.7 billion GBP (~$13 billion USD) syndicated loan agreement with Imperial Tobacco Finance PLC — an England and Wales-registered finance company wholly owned subsidiary of Imperial Tobacco Group PLC, a British multinational tobacco company cigarette maker later renamed Imperial Brands plc — and Imperial Tobacco Enterprise Finance Limited — an England and Wales-registered treasury services company wholly owned by Imperial Tobacco Group PLC — to support its acquisition of selected brands and assets from Reynolds American Inc. and for working capital and general corporate purposes. Imperial Tobacco Group plc and Imperial Tobacco Limited (ITL) issued guarantees for this loan. The proceeds of this loan were to be used to support the $7.1 billion USD of select brands and assets from Reynolds American as agreed in an asset purchase agreement entered with Reynolds American on July 15, 2014. These assets included U.S. cigarette brands of Winston, Maverick, Kool, Salem, international e-cigarette brand blu, and Lorillard Tobacco Company's national sales forces, offices, and production facilities upon Lorillard's merger with Reynolds America. The proceeds were also to be used to support Imperial Tobacco's working capital and funds for general corporate purposes. The £4.4 billion GBP acquisition financing facilities consisted of the following tranches: a $4.100 billion USD term loan tranche with a maturity period of one year and an two extension options of one year each (a maximum period of three years), a $1.500 billion USD term loan tranche with a maturity period of three years with an extension option of two years, and a $1.500 billion USD term loan tranche with a maturity period of five years with an extension option of one year. The refinancing and working capital facilities tranches consisted of a €1.000 billion EUR ($1.3 billion USD) revolving credit facility (RCF) tranche with a maturity period of 18 months (1.5 years) and three six-month (0.5) extension options (a maximum period of three years), a €2.835 billion EUR RCF tranche with a maturity period of five years and two one-year extension options and an interest rate based on EURIBOR plus an unspecified margin based on Imperial Tobacco's long-term credit rang from Moody's and S&P, and a £500 million GBP ($830.5 million USD) RCF tranche with a maturity period of five years and two one-year extension options and based on LIBOR plus an unspecified margin based on Imperial Tobacco's long-term credit rang from Moody's and S&P. Record ID#100227 captures BOC's contribution to the $4.100 billion USD term loan tranche for the acquisition of the Reynolds American assets. Record ID#100251 captures BOC's contribution to the $1.500 billion USD three-year term loan tranche for the acquisition of the Reynolds American assets. Record ID#100252 captures BOC's contribution to the $1.500 billion USD five-year term loan tranche for the acquisition of the Reynolds American assets. Record ID#100253 captures BOC's contribution to the €1.000 billion EUR RCF tranche for refinancing and working capital purposes. Record ID#100254 captures BOC's contribution to the €2.835 billion EUR RCF tranche for refinancing and working capital purposes. Record ID#100255 captures £500 million GBP tranche for refinancing and working capital purposes. In addition to BOC, the following lenders contributed to the loan syndicate: BNP Paribas Fortis SA/NV, Royal Bank of Scotland (RBS), Banco Santander S.A., Banco Bilbao Vizcaya Argentaria, S.A. (BBVA), Bank of America Merrill Lynch (BAML), Barclays Bank, Commerzbank AG, Crédit Agricole Corporate and Investment Bank (CACIB), HSBC Bank Plc, Intesa Sanpaolo S.p.A., Mizuho Bank, Sumitomo Mitsui Banking Corporation (SMBC), Société Générale S.A. (SocGen), Bank of Tokyo-Mitsubishi UFJ, Ltd. (BTMU), Unicredit Bank AG, and Wells Fargo Bank N.A.. BNP Paribas, RBS, and Banco Santander served as underwriters, mandated lead arrangers, and bookrunners. BOC, BBVA, BAML, Barclays, Commerzbank, CACIB, HSBC, Intesa Sanpaolo, Mizuho, SMBC, SocGen, BTMU, and Unicredit served as mandated lead arrangers. Wells Fargo served as lead arranger. RBS served as facility agent. As of September 30, 2014, all the facilities were undrawn. The acquisition was expected to complete in spring 2015. Imperial Tobacco completed the acquisition of the Reynolds American assets for a cash consideration of $7.056 billion USD (£4.613 million GBP) on June 12, 2015. The $4.1 billion USD acquisition credit facility was used and repaid in full in July 2015. As of September 30, 2015, the $1.5 billion USD five-year acquisition facility tranche was partially repaid and its face value reduced to $450 million USD. Then, around October 1, 2014 and September 30, 2015, the lenders extended the maturity period of the €2.835 billion EUR RCF tranche by 12 months — extending the maturity period from five years to six years — and the maturity period of the £500 million GBP of the €2.835 billion EUR RCF tranche by 12 months — extending the maturity period from five years to six years. Record ID#100256 captures this first debt restructuring for the €2.835 billion EUR RCF tranche. Record ID#100257 captures this first debt restructuring for the £500 million GBP RCF tranche. Between October 1, 2015 and September 30, 2016, the lenders extended the maturity period of the €2.835 billion EUR RCF tranche by 12 months — extending the maturity period from six years to seven years — for a new final maturity date of July 15, 2021 and the maturity period of the £500 million GBP of the €2.835 billion EUR RCF tranche by 12 months — extending the maturity period from six years to seven years — for a new final maturity date of July 15, 2021. Record ID#100258 captures this second debt restructuring for the €2.835 billion EUR RCF tranche. Record ID#100259 captures this second debt restructuring for the £500 million GBP RCF tranche. Between October 1, 2015 and September 30, 2016, the €1 billion EUR RCF refinancing and working capital tranche was reduced by €650 million EUR to €350 million EUR. Furthermore, the lenders extended the maturity period by 1.5 years — extend the maturity period from 1.5 years to three years — for a new final maturity date of July 15, 2017. Record ID#100260 captures the debt restructuring for the €1 billion EUR RCF tranche. On September 29, 2016, $300 million USD of bank term loans were repaid. Additionally, as of September 30, 2016, $900 million USD of the $1.5 billion USD three-year acquisition credit facility was outstanding, with a final maturity date of June 12, 2018. On January 27, 2017, the remaining $900 million USD bank term loan under the $1.5 billion USD three-year acquisition facility were repaid. On January 15, 2017, the remaining €350 million EUR under the €1 billion EUR RCF matured. As of September 30, 2019, €2.835 billion EUR tranche and £500 million GBP were still outstanding and due for repayment in July 2021. As of September 30, 2020, the €2.835 billion EUR tranche and £500 million GBP were cancelled.