Bank of China (Frankfurt Branch) contributes EUR 88.972 million to EUR 1.94 billion syndicated bridge loan to Siemens Energy Global to finance its acquisition of the outstanding share capital of Siemens Gamesa Renewable Energy

Project narrative

On May 21, 2022, a syndicate of J.P. Morgan SE and Bank of America, National Association Frankfurt Branch / Filiale Frankfurt am Main as underwriters entered into a €4,200,000,000 EUR bridge facility agreement with Siemens Energy Global GmbH & Co. KG — a German energy company wholly owned by Siemens Energy AG, a German energy company spun-off of Siemens AG and traded on the Frankfurt Stock Exchange (Börse Frankfurt) — to finance its acquisition of the remaining (not already owned) share capital of Siemens Gamesa Renewable Energy, S.A. (SGRE). Then, on June 23, 2022, the face value of the bridge facility was reduced to €2,900,000,000 EUR and it was syndicated to 19 lenders — including Bank of China Limited Zweigniederlassung Frankfurt am Main, Frankfurt Branch (BOC) — leading a lending syndicate of 21 total lenders. On October 7, 2022, the face value was reduced to €1,940,000,000 EUR because of Siemens Energy Finance B.V.'s issuance of convertible notes. This bridge facility (loan) carried an interest rate equal to EURIBOR (with a floor of zero percent) and a margin based on the credit rating of Siemens Energy AG by Moody's Deutschland GmbH, S&P Global Ratings Europe Limited and/or Fitch Deutschland GmbH, with a margin-step up every months from November 2022. This loan carried a maturity period of 1.5 years with a final maturity date of November 21, 2023 (that, or, if earlier, 12 months from the settlement date of the acquisition), with two six-month maturity options for the borrower from November 21, 2023. The borrower was required to repay the loan in full on the maturity date (a grace period equal to the maturity period). Siemens Energy AG and Siemens Energy Global GmbH & Co. KG each issued guarantees for the loan. All proceeds were to be utilized by the borrower towards the payment of the consideration of the acquisition not covered by the borrower's own funds or those raised by its issuance of mandatory convertible notes. The bridge facility was made under German law. The bridge facility included customary fees (ticking fees, guarantee fees, upfront fees, etc.). The bridge facility included provisions for mandatory prepayment: if it became illegal for any finance party to participate in its loan commitment or its role, the borrower would prepay the participation of the affected party; if Siemens Energy became a subsidiary of a different company or fell under the control of other people, each lender had to the individual right to seek repayment of their commitment; and if the Siemens group disposed of certain assets, such as the shares of Siemens Gamesa, or raised equity, bonds, or debt capital market issuances, the borrower had an obligation to prepay the bridge facility equal to the net proceeds of these transactions. The bridge facility included a provision for voluntary repayment, namely that the borrower could prepay in whole or part, so long as the minimum repayment amount was €10,000,000 EUR. The bridge facility included certain standard undertakings, including information undertakings (financial statements) and general undertakings (authorizations, legal compliance, ranking of obligations, a negative pledge, restrictions on disposals, insurance, restrictions on indebtedness, reorganization, environmental compliance, anti-money laundering and corruption, and sanctions). However, it did not include undertakings for maintenance of certain financial ratios or covenants. The bridge facility had provisions for certain standard events of default: non-payment of any amount due under the loan; failure to comply with non-payment obligations under the loan; misrepresentation; cross acceleration (when any indebtedness is not paid when due); insolvency and its proceedings; unlawfulness and repudiation; and cessation of business. Upon occurrence of an event of a default, the agent, if directed by the finance parties with commitments representing 66.6% of the total loan commitment, could issue a declaration to Siemens Energy Global announcing that the financing, accrued interest, and other amounts outstanding, would be immediately due and payable. The borrower planned to service the debt of the bridge loan with the cash flows generated by Siemens Energy Global through its business. However, Siemens Energy Global planned to fully refinance the bridge facility as soon as possible, even prior to the completion of the acquisition, with a capital increase, equity, equity-like instruments, and or debt issuance. Each lender, including BOC and excepting Bank of America, N.A. Frankfurt Branch and J.P. Morgan SE, committed €88,972,413.79 EUR to the loan syndicate as of October 7, 2022, with Bank of America and J.P. Morgan committing €169,248,275.89 EUR. Record ID#102113 captures BOC's contribution. In addition to BOC, the following lenders contributed to the loan syndicate: Bank of America, National Association Frankfurt Branch / Filiale Frankfurt am Main, J.P. Morgan SE, Banco Bilbao Vizcaya Argentaria, S.A., Banco Santander, S.A., BNP Paribas S.A., BNP Paribas Fortis S.A./N.V., CaixaBank, S.A. Zweigniederlassung Deutschland, Frankfurt am Main, the Germany Branch of Citibank Europe plc, Commerzbank Aktiengesellschaft, Crédit Agricole Corporate and Investment Bank Deutschland (CACIB Deutschland), Credit Suisse (Deutschland) AG, Deutsche Bank Luxembourg S.A., HSBC Continental Europe S.A., Landesbank Hessen-Thüringen Girozentrale (Helaba), Mizuho Bank, Ltd., Skandinaviska Enskilda Banken AB (publ) (SEB), SMBC Bank EU AG, Société Générale S.A. (SocGen), Standard Chartered Bank AG, and UniCredit Bank AG. Bank of America Europe Designated Activity Company (not a lender) and J.P. Morgan SE served as mandated lead arrangers and bookrunners. Bank of America, National Association Frankfurt Branch / Filiale Frankfurt am Main and J.P. Morgan SE served as the underwriters (original lenders). Bank of America Europe DAC served as agent for the facility. On May 21, 2022, Siemens Energy announced its voluntary cash tender off to acquire all outstanding shares of SGRE that it did not already own, about the approximately 32.9% of the share capital for €18.05 EUR per share. It launched the offer on November 8, 2022 that ended on December 13, 2022, with an acceptance rate of 77.9%, raising Siemens Energy's shareholding in SGRE to 92.7%. Siemens Energy opened a standing order from December 23, 2022 and February 7, 2023 occurred, , during which is acquired another 5.1% of the share capital in SGRE, leaving it with a 97.8% stake in the company. On January 25, 2023, the shareholders of SGRE approved the delisting of the company from Spanish stock exchanges, which was completed on February 14, 2023. Then, the On June 23, 2023, the remaining shareholders of SGRE approved a capital reduction for the remaining 2.2% shares not owned by Siemens Energy, so that, on July 12, 2023, Siemens Energy fully-owned SGRE. It renamed the company to Siemens Gamesa Renewable Energy S.A.U.. On December 21, 2022, €1.6 billion EUR was drawn under the bridge loan. On March 23, 2023, the borrower repaid €350 million EUR of the outstanding amount using proceeds of a capital increase. In fiscal year 2023, the loan was reduced to €620 million EUR, fully drawn. Then, in October 2023, the lending syndicate entered into an amendment with borrower; per this agreement, the lending syndicate extended the maturity period of the loan by six months (0.5 years) — for a new maturity period of two years and for a new final maturity date in May 2024 — in line with the first extension option in the loan agreement (the grace period, by virtue of being the same length as the maturity, was also extended). Record ID#102118 captures BOC's contribution to this debt rescheduling. Siemens Gamesa Renewable Energy, S.A. (SGRE) is Spain-incorporated renewable energy company based in Zamudio, Biscay, that manufactures wind turbines and was the wind unit of Siemens Energy, its majority shareholder prior to the acquisition. It was formed in 2017 out of the merger between Germany's Siemens Wind Power and Spain's Gamesa Corporación Tecnológica S.A. It had an onshore portfolio across Europe, Latin America, and India and facilities in northern Africa, East Asia, Europe, and North America. It is the world's second largest wind turbine manufacturer after Vestas.