ICBC contributes to a $2.54 billion USD syndicated loan to SMBC Aviation Capital to facilitate its acquisition of a 100% stake in Goshawk Management Limited and associated corporate assets from Goshawk Aviation Limited (Linked to Record ID#103670)

Project narrative

On May 16, 2022, SMBC Aviation Capital Limited (SMBC AC) -- an Ireland-incorporated and Dublin-based aircraft leasing company jointly owned by Sumitomo Mitsui Banking Corporation (SMBC), a subsidiary of Sumitomo Mitsui Financial Group, Inc. (SMFG) (30% ownership stake), Sumitomo Corporation (10% ownership stake), and Sumitomo Mitsui Finance and Leasing Company, Limited (60% ownership stake) — announced that it had entered into an agreement with NWS Holdings Limited, a Hong Kong-based company and subsidiary of conglomerate New World Development Company Limited, and Chow Tai Fook Enterprises Limited (CTFE) to acquire each of their 50% stakes (a 100% stake in total) in Goshawk Management Limited and associated corporate assets from Goshawk Aviation Limited (a Dublin-based global aircraft lessor) for an enterprise value of $6.7 billion USD but an equity value of $1.6 billion USD ($12.48 billion HKD). On September 28, 2022, financial close was reached on a deal in which a syndicate of 13 banks — including the London Branch of the Industrial and Commercial Bank of China (ICBC) and the Hong Kong Branch of China Everbright Bank Co., Ltd. — entered into a $1.725 billion USD syndicated loan agreement with SMBC Aviation Capital to finance its acquisition of a 100% stake in Goshawk Management Limited and associated corporate assets from Goshawk Aviation Limited. This loan was divided into two tranches: a $1.294 billion USD term loan tranche and a $431 million USD revolving credit facility (RCF) tranche, both with a maturity period of five years. The term loan carried an interest rate of SOFR plus a margin of 138 basis points (bps) and the RCF carried an interest rate of SOFR plus a margin of 143 bps. This loan contained a greenshoe option to increase the face value. Syndication was set to launch shortly after financial close to fill in the greenshoe option. Then, sometime after financial close, SMBC Aviation raised a further $840 million USD to the syndicated loan from 19 banks, lifting its face value to $2.54 billion USD and the total number of participating banks to 32. With the filling of the greenshoe, the $1.294 billion USD tranche was increased to $1.83 billion USD and the $431 million USD RCF was increased to $710 million USD. The proceeds of this loan were used by the borrower to partially fund the acquisition of Goshawk. Record ID#103668 captures ICBC's contribution. Record ID#103670 captures China Everbright Bank's contribution. In addition to the two Chinese state-owned banks, the following lenders contributed to the loan syndicate as part of the 13 original lenders: Australia and New Zealand Banking Group (ANZ), Citigroup Global Markets Asia Limited, BNP Paribas S.A., DBS Bank, Ltd., Oversea-Chinese Banking Corporation Limited (OCBC Bank), Cathay United Bank, the Korea Development Bank (KDB), CaixaBank S.A., The Hongkong and Shanghai Banking Corporation Limited (HSBC), Apple Bank for Savings Inc., and KeyBank N.A. ANZ and Citi served as joint global coordinators, mandated lead arrangers and active bookrunners. BNP Paribas, DBS Bank, OCBC Bank, and Cathay United Bank served as mandated lead arrangers and active bookrunners. ICBC, KDB, and Caixa Bank served as mandated lead arrangers and bookrunners. HSBC served as a senior mandated lead arranger. China Everbright Bank, Apple Bank, and KeyBank served as mandated lead arrangers, all joining in the senior syndication phase. The acquisition included Goshawk's commercial aircraft leasing platform, which consisted substantially of all its assets, liabilities, and contracts, but excluded any Goshawk aircraft leased to Russian airlines. The acquisition encountered issues due to the sanctions imposed upon Russia due to its invasion of Ukraine; the sanctions left six Goshawk aircraft stranded in Russia and made it unclear whether acquiring them was legal. The transaction proceeded to excluded the Goshawk aircraft leased to Russian airlines and their book value from the equity consideration; SMBC Aviation Capital would acquire all of Goshawk's fleet except for the six aircraft. The acquisition was completed on December 21, 2022. Goshawk Management Limited was then renamed SMBC Aviation Capital Management Limited. The acquisition created the world's second largest aircraft leasing company with a fleet of 709 owned and managed aircraft, with a total of $37 billion USD when including the orderbook. It also created the largest Japanese-owned aircraft lessor. The enlarged SMBC Aviation Capital consisted of a single corporate holding structure incorporated and Ireland and headquartered in Dublin. On December 28, 2022, the Japan Bank for International Cooperation (JBIC) signed a $2.00 billion USD loan with Sumitomo Mitsui Finance and Leasing Company (SMFL) — a shareholder of SMBC AC — to partly finance the acquisition of Goshawk. Then, in February 2023, SMFL signed two loan agreements worth $300 million USD each with Mizuho Bank and MUFG Bank to part finance SMBC AC's acquisition of Goshawk.