BOC Luxembourg contributes to the €1 billion EUR portion of a €5.75 billion EUR syndicated loan for the Deutsche Glasfaser FTTP Network 2021 Refinancing Project

Project narrative

On December 13, 2021, a syndicate of at least 38 lenders — including the Bank of China (Luxembourg) S.A. (BOC Luxembourg) — entered into a €5.75 billion EUR ($6.5 billion USD) syndicated senior sustainability-linked loan (SLL) agreement with Speedbreak BidCo GmbH — a Germany-incorporated special purpose vehicle (SPV) of Deutsche Glasfaser Holding GmbH (DGF), a German fiber optic network company and the country's largest independent fiber to the home (FTTH) operator, that is owned by EQT Infrastructure IV and EQT Infrastructure (51% equity stake together)) and Canadian pension fund OMERS Infrastructure (49% equity stake) — for the Deutsche Glasfaser FTTP Network 2021 Refinancing Project. This loan was divided into three tranches: a €2.5 billion EUR capex (investment) facility tranche; a €3.0 billion EUR term loan tranche; and a €250 million EUR revolving credit facility (RCF) tranche. Additionally, there was an uncommitted accordion credit facility of €1.5 billion EUR (raising the facility to €7.25 billion EUR). This loan carried maturity period of seven years, a final maturity date of December 13, 2028, a bullet repayment profile, and an interest rate of EUIRBOR plus a margin starting above 200 basis points (bps) and finishing at just above 300 bps. As a SLL loan, this loan measured the borrower's performance against sustainability-linked indicators, namely that DGF's reduction of carbon emissions, DGF's speed in connecting under-served areas, and DGF's performance in annual employee surveys, with a 7.5 bps positive or negative ratchet on the interest rate's margin based on the borrower's performance on those indicators. Financial close was reached on January 11, 2022. The proceeds were to be used by the borrower to provide capital support its FTTH project (also referred to as an Fiber-To-The-Premises (FTTP) project) and to refinance its existing indebtedness, namely three existing financings (the €2.5 billion EUR capex facility tranche was to be allocated for this). The FTTH project sought to construct six million fiber optic connections in inner city and rural areas of Germany, with a target of about four million households by the end of 2025, covering 10% of German households. ABN AMRO Bank N.V., Crédit Agricole Corporate and Investment Bank (CACIB), BNP Paribas S.A., ING Group N.V., KfW IPEX-Bank, Banco Santander S.A., Skandinaviska Enskilda Banken AB (SEB), Societé Générale S.A. (SocGen), Sumitomo Mitsui Banking Corporation (SMBC), and UniCredit S.p.A. served as the 10 underwriters. AXA IM Alts, Generali Global Infrastructure (GGI), Kommunalkredit, Landesbank Baden-Württemberg (LBBW), and National Australia Bank Limited (NAB) served as the five cornerstone lenders. BOC Luxembourg, Allied Irish Banks p.l.c. (AIB), BNP Paribas Asset Management, Crédit Industriel et Commercial (CIC), Erste Bank, Euler Hermes Kreditversicherungs, Intesa Sanpaolo S.p.A., KEB Hana Bank, La Banque Postale, Landesbank Hessen-Thuringen (Helaba), MetLife, MUFG Bank, Ltd., Natixis, NIBC Bank N.V., Nord/LB, Raiffeisen Bank, SCOR SE, and Triodos Bank joined in syndication. Other lenders (presumably joining in syndication) included Banco Bilbao Vizcaya Argentaria, S.A. (BBVA), CIBC World Markets, Deutsche Bank, Edmond de Rothschild, Oesterreichische Nationalbank, and Coöperatieve Rabobank U.A.. SocGen and SMBC served as lead banks, ABN AMRO, BNP Paribas, KfW, Santander, SEB, SMBC, and UniCredit served as bookrunners. CACIB served as mandated lead arranger, bookrunner, and hedge coordinator. UniCredit also served as mandated lead arranger. BOC Luxembourg joined as a mandated lead arranger. ING and CACIB served as sustainability coordinators. CIBC World Markets served as a mandated lead arranger. Over €1 billion EUR of the loan was syndicated, namely portions of the €2.5 billion EUR capex facility tranche and a €3 billion EUR term loan tranche. The 10 underwriters were the sole providers of the €250 million EUR RCF tranche.