Narrative
Full Description
Project narrative
On March 26, 2020, a syndicate of at least six banks — including the London Branch of the Industrial and Commercial Bank of China (ICBC) — entered into a £500 million GBP syndicated loan agreement with Annington Funding plc (AFP) — an England and Wales-incorporated finance special purpose vehicle (SPV) of Annington Homes Limited, a wholly-owned subsidiary of Annington Limited, a privately-rented housing provider in the United Kingdom, which is wholly owned by Terra Firma Capital Partners Ltd. (TFCP) — for unspecified purposes. This was an amendment and extension of two existing tranches: a £400 million GBP unsecured term loan tranche with an interest rate of LIBOR plus a margin of 1.5% and a £300 million GBP revolving credit facility (RCF) tranche both originally maturing in July 2022. Under the new agreement, the £400 million GBP term loan tranche carried a maturity period of five years, a final maturity date in March 2025, and an interest rate of LIBOR plus a margin of 1.6%, and the RCF tranche, which had its face value reduced to £100 million GBP, carried a maturity period of five years and a final maturity date of March 2025. The agreement became effective on April 1, 2020. The proceeds of the £100 million GBP RCF tranche were meant to exist to ensure that the borrower did not default in the repayment of the borrowing and interest to the bondholders. Record ID#101904 captures ICBC's contribution. In addition to ICBC, the following lenders contributed to the loan syndicate: Allied Irish Banks p.l.c. (AIB), Barclays Bank PLC, Goldman Sachs Bank USA, J.P. Morgan, and National Westminster Bank plc (NatWest). Barclays Bank served as agent. The entirety of the £400 million GBP term loan tranche had been drawn down by March 31, 2020, and carried the new interest and terms beginning April 1, 2020, while the £100 million GBP RCF tranche was undrawn. As of March 31, 2021, the £100 million GBP RCF tranche remained undrawn. In January 2022, the lending syndicate entered into an amendment agreement with the borrower to change the interest rate of the £400 million GBP from LIBOR plus a margin of 1.6% to SONIA plus a margin of 1.6% in light of LIBOR's discontinuance. As of March 31, 2022, the £100 million GBP RCF tranche remained undrawn. Then, in February 2023, the lending syndicate — now seven banks, with Sumitomo Mitsui Banking Corporation (SMBC) as a new lender — entered into an amendment agreement with the borrower for the £500 million GBP syndicated loan; in this agreement, the lenders extended the maturity period of the loan by approximately three years (a maturity period of eight years from the original loan) for a new final maturity date in February 2028 and increased the interest rate of the £400 million GBP term loan tranche to SONIA plus a margin of 185 basis points (bps), an increase of 0.25% from the previous margin of 1.6%. Record ID#101928 captures ICBC's contribution to this debt restructuring. As of March 31, 2021, the £100 million GBP RCF tranche remained undrawn.
Staff comments
1. ICBC was an existing relationship lender by the February 2023 extension; therefore, it must have been a lender on the £400 million GBP term loan and the £100 million GBP RCF. The loan originally existed prior to March 2020, when it was amended with a maturity extension. Because it was an existing lender, ICBC must have been a lender on the March 2020 amendment and extension — however, AidData has yet to prove it was a lender before that amendment and extension; it may have joined only at that time. For the time being, AidData has treated the March 2020 amendment and extension as ICBC's first participation of this loan, and as its first moment of participation, AidData codes this record's flow_type field as a loan and not a debt restructuring. 2. The individual contributions to the six lenders to this £500 million GBP syndicated loan, including their contributions to the £400 million GBP term loan tranche and the £100 million GBP RCF tranche, are unknown. For the time being, AidData has assumed that each lender contributed to each tranche, and has estimated the contribution of ICBC by assuming that each lender contributed an equal amount (£83,333,333.3333 GBP) to the loan syndicate. 3. It is unconfirmed that ICBC contributed to each tranche; for the time being, AidData has assumed it has, but created one singular record for its contribution incorporating the loan terms of both the RCF and term loan tranches (each having a five-year maturity period, the former having an unknown interest rate to the latter's known). This issue merits further investigation. 4. A 6-month LIBOR rate was assumed. The average 6-month GBP LIBOR rate for March 2020 was 0.61385%. Therefore, the interest rate has been coded as2.21385% = 2.21385%. 5. Annington specializes in converting former housing under the United Kingdom's Ministry of Defence into houses for the general public.