Narrative
Full Description
Project narrative
In early October 2013, a syndicate of 36 banks — including the Bank of China (BOC) — signed a €10 billion EUR ($13.54 billion USD) syndicated loan agreement with Nestlé S.A. — a Swiss multinational food and drinking processing conglomerate and owner of brands such as Aero, Kit Kat, Rolo, Nespresso, Nescafé, and Nesquik — for general corporate purposes. This loan consisted of two tranches: a €5 billion EUR revolving credit facility (RCF) tranche with a maturity period of 364-days with a one-year extension option, an interest rate based on a floating rate plus a margin of 10 basis points (bps), and a commitment fee of 1 bps; and a €5 billion EUR RCF tranche with a maturity period of five years, an interest rate based on a floating rate plus a margin of 12.5 bps, a commitment fee of 3.75 bps, and with $2.5 billion USD swingline feature. Each tranche was available for drawn down in U.S. dollars and euros. The loan featured utilization fees that were to be paid if the loan was drawn (the loan being intended to be undrawn). The proceeds were to be used by the borrower for general corporate purposes, namely as a standby liquidity facility. 36 banks in total contributed to the two tranches of the €10 billion EUR loan; Nestlé self-arranged the loan, which was oversubscribed but not up-sized. It is unclear whether BOC contributed to the five-year €5 billion EUR RCF tranche. The following 16 lenders are known to have contributed to that tranche: Australia and New Zealand Banking Group (ANZ), Banco Santander S.A., Bank of America Merrill Lynch (BAML), the Bank of Tokyo-Mitsubishi, Ltd. (BTMU), Barclays Bank Plc, BNP Paribas S.A., Credit Suisse AG, Deutsche Bank AG, HSBC Bank Plc, ING Group N.V., JPMorgan Chase Bank N.A., Royal Bank of Canada (RBC), Royal Bank of Scotland (RBS), Société Générale S.A. (SocGen), Standard Chartered Bank Plc, and Citigroup. Citigroup served active bookrunner, and the remaining lenders served as bookrunners. BOC is known to have contributed to the 364-day €5 billion EUR RCF tranche. In addition to BOC, the following 18 lenders are known to have contributed to the 364-day €5 billion EUR RCF: Crédit Agricole Group, Wells Fargo Bank N.A., ANZ, Banco Santander, BAML, BTMU, Barclays, BNP Paribas, Credit Suisse, Deutsche Bank, HSBC Bank, ING, JPMorgan Chase, RBC, RBS, SocGen, Standard Chartered, and Citigroup. Citigroup served active bookrunner, and the remaining lenders served as bookrunners.
Staff comments
1. BOC is specifically identified as a bookrunner on the 364-day tranche; thus it is unconfirmed whether it contributed to the five-year tranche. For the time being, AidData has elected to treat it as having only contributed to the 364-day tranche. Furthermore, it is known that 36 lenders in total contributed to the entire syndicated loan, while only 19 lenders are known for the 364-day loan. To avoid overestimating BOC's contribution, AidData has assumed that all 36 lenders contributed to the 364-day tranche for purposes of its equal contributions assumption; the individual contributions of these 36 lenders to the 364-day €5 billion EUR RCF tranche of this €10 billion EUR loan is unknown. Therefore, to estimate BOC's contribution, AidData has assumed that each lender contributed equally (€138,888,888.889 EUR) to the €5 billion EUR RCF tranche. 2. In October 2015, BOC and a number of lenders provided a one-year €5.6 billion EUR RCF tranche as part of a €11.2 billion EUR loan to Nestlé (see Record ID#100954); there are indications that the October 2015 €5.6 billion EUR RCF tranche may have refinanced the October 2013 €5 billion EUR RCF tranche. This issue merits further investigation.