Bank of China contributes to a €1.29 billion EUR syndicated loan to facilitate Shanghai Jinjiang International Hotels Development’s acquisition of a 100% stake in Groupe de Louvre S.A.S. (Linked to Record ID#100861 and #103017)

Project narrative

In February 2015, the Industrial and Commercial Bank of China (ICBC) issued an up to €1.5 billion EUR bridge loan to Sailing Investment Co, S.à r.l. — a special purpose vehicle incorporated under the laws of Luxembourg and a wholly-owned subsidiary of Chinese hotel company Shanghai Jin Jiang International Hotels Development Company Limited, which is listed on the Shanghai Stock Exchange but is a subsidiary of Shanghai Jin Jiang International Hotels (Group) Company Limited, which is 75% owned by Chinese tourism company Jin Jiang International Holdings Company Limited, itself wholly-owned by the State-owned Assets Supervision and Administration Commission of Shanghai Municipal Government (Shanghai SASAC) — to facilitate Shanghai Jinjiang International Hotels Development’s acquisition of a 100% stake in Groupe de Louvre (Louvre Hotels Group) from U.S. investment company Starwood Capital Group. This loan carried a final maturity date of June 22, 2015 (a maturity period of approximately 0.25 years) and an interest rate of three-month EURIBOR plus a margin of 200 basis points (bps). The Board of Directors of Shanghai Jin Jiang International Hotels approved the loan on February 9, 2015. Record ID#100861 captures ICBC's bridge loan. On May 13, 2015, a syndicate of seven banks — including the Bank of China (BOC) and the Industrial and Commercial Bank of China (ICBC) — entered into a €1,290,000,000 EUR ($1.46 billion USD; RMB 9,617,724,000) syndicated senior secured term facility (loan) agreement with Sailing Investment Co, S.à r.l. to facilitate Shanghai Jinjiang International Hotels Development’s acquisition of Groupe de Louvre (Louvre Hotels Group) from Starwood Capital. This loan carried a maturity period of three years, with €387,000,000 EUR (30%) due after two years (a grace period of two years) and €903,000,000 EUR due after three years, a borrowing period from May 19, 2015 to May 18, 2018 (the final maturity date). This loan was divided into two tranches: a tranche known as 'A' backed by a standby letter of credit (SBLC) from Chinese banks and a tranche known as 'B' guaranteed by Shanghai Jin Jiang International Hotels (Group) Company Limited. This loan carried an interest rate based on a floating rate, with an average weight rate of 1.124%. This loan was secured by (i.e. collateralized against) a pledge of a bank deposit RMB 944,712,000.00 due within one year and a bank deposit of RMB 3,778,848,000.00 due after one year and the shares of Sailing Investment Co, S.à r.l. Shanghai Jin Jiang International Hotel Development issued a guarantee in support of this loan. The proceeds were to be used by the borrower to replace a €1.5 billion EUR bridge loan provided by ICBC for the acquisition. Record ID#103016 captures BOC's contribution. Record ID#103017 captures ICBC's contribution. In addition to BOC and ICBC, the following lenders contributed to the loan syndicate: HSBC Bank Plc, Standard Chartered Bank PLC, BNP Paribas S.A., Société Générale S.A. (SocGen) and Crédit Agricole Corporate and Investment Bank (CACIB). All lenders served as mandated lead arrangers. ICBC served as the global coordinator. Most of the banks lent for tranche 'A'. On November 3, 2014, Shanghai Jin Jiang International Investment and Management Co., Ltd., a wholly-owned subsidiary of Jin Jiang International Holdings Company Limited, entered into a put option agreement and deposit escrow agreement with Star SDL Investment Co S.à r.l. for the acquisition. On January 6, 2015, Shanghai Jin Jiang International Investment and Management Co., Ltd. issued a Letter of Grant of Right of Participation to Shanghai Jin Jiang International Hotels (Group) Company Limited and Shanghai Jin Jiang International Hotels Development Company Limited, agreeing to grant them the right of acquisition for 100% of the shares in GDL. On January 14, 2015, the board of directors of Shanghai Jin Jiang International Hotels Development Company Limited agreed to participate via Sailing Investment Co, S.à r.l. On January 28, 2015, Shanghai Jin Jiang International Hotels (Group) Company Limited received the written shareholder’s approval from its controlling shareholder Jin Jiang International Holdings Company Limited. Then, on January 30, 2015, Shanghai Jin Jiang International Hotels Development Company Limited received its shareholders’ approval for the acquisition. On February 16, 2015, Sailing Investment Co, S.à r.l. signed a share purchase agreement with Star SDL Investment Co S.à r.l. to acquire all the equity of Star SDL's wholly-owned subsidiary, Groupe du Louvre (GDL). The acquisition was completed on February 27, 2015. Groupe du Louvre S.A.S. (GDL) is a France-incorporated investment holding company that owns a 100% shareholding interest in Star Eco S.A.S. and Louvre Hotels Group S.A.S. (LHG). GDL is a major hotel chain, principally operating various chain budget hotels through the brands Premie' re Classe, Campanile, Kyriad series (Kyriad and Kyriad prestige) and the operation of upscale hotels through the brand of Golden Tulip series (Tulip Inn, Golden Tulip, and Royal Tulip). As of June 30, 2014, LHG owned, managed, and operated (via franchise agreements) 115 hotels with 91,154 hotel rooms in 46 countries; 970 (87.00%) of these hotels were in Europe, 820 of which were in France. Other countries of operations included Italy, the Netherlands, and the United Kingdom, with expansions into the United States, the Middle East, Africa, and Asia.