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Overview

ICBC Dubai provides $10 million offshore loan to Aeropuertos Argentina 2000 for general corporate purposes

Commitments (Constant USD, 2023)$9,449,191
Commitment Year•2022Country of Activity•ArgentinaDirect Recipient Country of Incorporation•ArgentinaOverseas Jurisdiction•United Arab EmiratesSector•Transport And StorageFlow Type•Loan

Status

Project lifecycle

Implementation

Pipeline: PledgePipeline: CommitmentImplementationCompletion

Timeline

Key dates

Commitment date
Jul 25, 2022
First repayment (originally scheduled)
Apr 23, 2025
Last repayment (originally scheduled)
Oct 29, 2025

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)

Receiving agencies

Private Sector

  • Aeropuertos Argentina 2000 S.A. (AA2000)

Collateral providers

Private Sector

  • Aeropuertos Argentina 2000 S.A. (AA2000)

Security / collateral agents

State-owned Commercial Banks

  • Industrial and Commercial Bank of China (Argentina) Limited (ICBC (Argentina))

Loan description

ICBC Dubai provides $10 million offshore loan to Aeropuertos Argentina 2000 for general corporate purposes

Grace period•2.75 yearsGrant element•0%Interest rate (t₀)•10.76835%Interest type•Variable Interest RateMaturity•3.25 years

Collateral

First, the fiduciary assignment of income transferred from Terminal de Cargas Argentina, a business unit of AA2000, pursuant to a trust agreement (Cargo Trust) signed August 9, 2019 between AA2000 and the Argentine branch of Citibank NA, in its capacity as trustee (ranking pari passu with other, unspecified loan obligations and Class 4 corporate bonds). Second, international and regional air station usage fees and rights compensation from the concession (which AA2000 has the right to receive as trustee and beneficiary under a Fee Trust).

Narrative

Full Description

Project narrative

On July 25, 2022, the Industrial and Commercial Bank of China Limited, Dubai (DIFC) Branch (ICBC Dubai) signed a loan contract with Aeropuertos Argentina 2000 SA (AA2000) for a $10 million USD offshore loan. The loan was to be used primarily to fund capital expenses related to AA2000's long-standing concession contract with the Government of Argentina to operate and manage 35 airports in the country. The entire loan commitment amount was disbursed on July 29, 2022. The maturity was 39 months (3.25 years), counted from the disbursement date. Repayments were to be made in three quarterly installments, with the first to occur 33 months after the disbursement date, effectively resulting in a grace period of 2.75 years. The loan carried a variable rate of SOFR, plus a 7.875% margin. The loan was secured with, first, the fiduciary assignment of income transferred from Terminal de Cargas Argentina, a business unit of AA2000, pursuant to a trust agreement (Cargo Trust) signed August 9, 2019 between AA2000 and the Argentine branch of Citibank NA, in its capacity as trustee (ranking pari passu with other, unspecified loan obligations and Class 4 corporate bonds). Second, it was secured by international and regional air station usage fees and rights compensation from the concession (which AA2000 has the right to receive as trustee and beneficiary under a Fee Trust). Industrial and Commercial Bank of China (Argentina) SAU (ICBC Argentina) acted as local escrow agent for the offshore loan.

Staff comments

1. AidData has calculated the loan's all-in interest rate (9.405%) by taking the SOFR rate at the time of commitment (1.53% at July 25, 2022) and adding the applicable margin (7.875%). However, a media report -- which seemingly contains information from one or more of the law firms advising on the transaction -- reports that the 90-day SOFR rate was used as the basis for the variable interest rate. AA2000's financial statements do not identify the basis for the interest rate as the 90 day average (only specifying the SOFR rate + the 7.875% margin). AidData relies on AA2000's financial statements for the time being (as the more official source). However, this discrepancy warrants further investigation. 2. Marval O’Farrell Mairal and Linklaters LLP (USA) served as legal advisors to ICBC Dubai and ICBC Argentina. Additionally, ICBC's in-house lawyers provided legal advice.