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Overview

ICBC contributes to a $1.2 billion USD syndicated loan to Telefónica Europe for the procurement of telecommunications equipment and related services (Linked to Record ID#102047)

Commitments (Constant USD, 2023)$650,290,701
Commitment Year•2012Country of Activity•SpainDirect Recipient Country of Incorporation•NetherlandsSector•CommunicationsFlow Type•Loan

Status

Project lifecycle

Completion

Pipeline: PledgePipeline: CommitmentImplementationCompletion

Timeline

Key dates

Commitment date
Aug 28, 2012
Last repayment (originally scheduled)
Jan 1, 2023

Stakeholders

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

Ultimate beneficial owners

At least 25% host country ownership

Funding agencies

State-owned Commercial Banks

  • Industrial and Commercial Bank of China (ICBC)

Cofinancing agencies

State-owned Policy Banks

  • China Development Bank (CDB)

Receiving agencies

Private Sector

  • Telefónica Europe, B.V.

Guarantors

Private Sector

  • Telefónica, S.A.

Loan description

2012 syndicated $1.2 billion USD loan from CCB, ICBC, and others to Telefónica Europe for the procurement of telecommunications equipment and related services in Spain

Interest type•Variable Interest RateMaturity•10 years

Narrative

Full Description

Project narrative

On August 28, 2012, a two-bank syndicate — China Development Bank Corporation (CDB) and the Industrial and Commercial Bank of China (ICBC) — entered into a $1.200 billion USD (€915.5 million EUR) syndicated loan agreement with Telefónica Europe, B.V. — a Netherlands-incorporated wholly-owned subsidiary Spanish multinational telecommunications company Telefónica, S.A. — for the procurement of telecommunications equipment and related services. This loan carried a maturity period of 10 years, a final maturity date in 2023, a balloon repayment profile, and a variable interest rate. Telefónica, S.A. issued a guarantee for this loan. The proceeds were to be used by the borrower to procure telecommunications equipment and related services worldwide. Record ID#102047 captures CDB's contribution. Record ID#102048 captures ICBC's contribution. This was reportedly the largest equipment financing loan provided to a European company by a Chinese bank. At the time of the loan, Telefónica was experiencing debt issues (spurred by Spain's weakening economy and Telefónica's growing net financial debt) and a need to cut costs to reduce debt in the near-term and maintain its investment-grade credit rating, with the $1.2 billion USD loan advancing that need. As of December 31, 2012, no amount had not been drawn down on this loan. As of December 31, 2014, the outstanding principal was $844 million USD (€714 million EUR). Then, in 2015, Telefónica Europe repaid the $1.2 billion USD loan early.

Staff comments

1. Telefónica, S.A. is a public limited company that is registered in Spain. Telefonica Europe B.V. is a private limited liability company and a wholly-owned subsidiary of Telefónica, S.A. that is registered in the Netherlands. 2. The individual contribution of CDB and ICBC to this $1.2 billion USD syndicated loan is unknown. For the time being, AidData has estimated the contributions of the banks by assuming that each lender contributed an equal amount ($600,000,000 USD) to the syndicated loan.