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Overview

Bank of China contributes to debt rescheduling — via a one-year maturity extension in 2023 — of a €500 million EUR syndicated sustainability-linked revolving credit facility to MTU Aero Engines for general corporate purposes (Linked to Record ID#101799)

Commitment Year•2023Country of Activity•GermanyDirect Recipient Country of Incorporation•GermanySector•Action Relating To DebtFlow Type•Debt rescheduling

Status

Project lifecycle

Completion

Pipeline: PledgePipeline: CommitmentImplementationCompletion

Timeline

Key dates

Commitment date
Jan 1, 2023
Last repayment (originally scheduled)
Jun 29, 2028

Stakeholders

Organizations involved in projects and activities supported by financial and in-kind transfers from Chinese government and state-owned entities

Funding agencies

State-owned Commercial Banks

  • Bank of China (BOC)

Cofinancing agencies

Private Sector

  • Banque Européenne Crédit Mutuel (BECM)
  • BNP Paribas S.A.
  • Commerzbank Aktiengesellschaft (Commerzbank AG)
  • Deutsche Bank AG
  • HSBC Bank PLC
  • UniCredit S.p.A. (formerly UniCredito Italiano S.p.A.)

State-owned Banks

  • Bayerische Landesbank (BayernLB)

Receiving agencies

Private Sector

  • MTU Aero Engines AG (MTUAF)

Loan description

Bank of China contributes to debt rescheduling — via a one-year maturity extension in 2023 — of a €500 million EUR syndicated sustainability-linked revolving credit facility to MTU Aero Engines for general corporate purposes (Linked to Record ID#101799)

Interest type•Variable Interest RateMaturity•6 years

Narrative

Full Description

Project narrative

In June 2022, a syndicate of nine banks — including the Bank of China (BOC) — entered into a €500 million EUR syndicated sustainability-linked revolving credit facility (RCF) agreement with MTU Aero Engines AG — a German military and civil aircraft engine developer and manufacturer — for general corporate purposes. This loan carried a maturity period of five years and a final maturity date of June 29, 2027 with two one-year extension options, an interest rate based on EURIBOR for the relevant period plus an unspecified margin (possibly linked to the borrower's investment-grade credit rating), and an option to increase the RCF to €700 million EUR. The proceeds were to be used by the borrower for general corporate purposes, including acquisitions. Record ID#101799 captures BOC's contribution. In addition to BOC, the following lenders contributed to the loan syndicate: Commerzbank AG, UniCredit S.p.A., BNP Paribas S.A., Deutsche Bank, HSBC Bank Plc, Banque Européenne Crédit Mutuel (BECM), Bayerische Landesbank (BayernLB), and Landesbank Baden-Württemberg (LBBW). Commerzbank and UniCredit served as mandated lead arrangers and bookrunners. BNP Paribas, Deutsche Bank, and HSBC were mandated lead arrangers. BOC, BECM, BayernLB, and LBBW served as lead arrangers. Commerzbank served as agent and documentation agent. UniCredit served as sustainability coordinator. As of December 31, 2022, the RCF was undrawn. Then, in 2023, — still including BOC — entered into an amendment agreement with the borrower; in this amendment agreement, the maturity period of the loan was extended by one year — to June 29, 2028 for a new maturity period of six years — in line with the maturity extension option. Record ID#101800 captures BOC's contribution to the debt rescheduling. As of December 31, 2023, the RCF was undrawn.