Bank of China contributes to a $900 million USD syndicated revolving credit facility to the Carlyle Group and GIC to facilitate their acquisition of a 100% equity stake in AkzoNovel's Specialty Chemicals business (Linked to Record ID#104541 and #104594)

Project narrative

On March 27, 2018, The Carlyle Group and GIC entered into an agreement with the Board of Management and the Supervisory Board of Akzo Nobel N.V. — a Dutch paints and coating company and specialty chemicals manufacturer headquartered in Amsterdam — to purchase a 100% stake in AkzoNobel's Specialty Chemicals business for an enterprise value of €10.1 billion EUR ($12.411 billion USD) and expected cash payment of €8.9 billion EUR. On October 1, 2018, a syndicate of 25 banks — including the Luxembourg Branch of the Bank of China (BOC) — entered into three syndicated loan agreements with Starfruit Finco B.V., Starfruit US Holdco LLC, and Starfruit Swedish Bidco AB — special purpose vehicles (SPVs) incorporated in the Netherlands, Delaware in the United States, and Sweden, respectively, jointly owned by Carlyle Partners VII Cayman Holdings, L.P. (a Cayman Islands-incorporated vehicle owned by Carlyle Partners VII)., CEP IV Starfruit S.a.r.l. (a Luxembourg-incorporated vehicle for Carlyle Europe Partners IV), and Aurora Investment Pte. Ltd. (a Singapore-incorporated owned by Singaporean sovereign wealth fund GIC) — to facilitate their acquisition of a 100% equity stake in the specialty chemicals division of Dutch paints and chemicals manufacturer AkzoNobel. The three loans were a $4.340 billion USD senior secured first-lien term loan B facility with a maturity period of seven years from the closing date and an interest rate based on LIBOR (with a 0.00% floor rate) plus a margin at 325 basis points (bps) that was based on the borrowers' consolidated first lien leverage ratio with one ratio-based 25 basis point step down and a 25 basis point step down upon completion of an initial public offering (IPO); a €1.790 billion EUR ($2.1 billion USD) senior secured first-lien term loan facility with a maturity period of seven years from the closing date and an interest rate based on EURIBOR (with a 0.00% floor rate) plus a margin of 375 bps based on the borrowers' consolidated first lien leverage ratio-based 25 basis point step down a 25 basis point step down upon completion of an IPO; and a $900 million USD (€750 million) senior secured first-lien multi-currency revolving credit facility (RCF) with a maturity period of six years and based on a variable interest rate plus a margin on the borrowers' consolidated first lien leverage ratio and four ratio-based 25 basis point step downs. The $4.34 billion USD term loan facility would amortize in equal quarterly installments in an amount equal to 1.00% per annum of the original principal amount thereof, with the remaining balance due at final maturity. Amortization could be reduced as a result of the application of prepayments to the dollar term loans or increased as a result of the incurrence of additional dollar term loans. There was no amortization of the RCF or the €1.79 billion EUR term loan, with the aggregate principal amount thereof due at final maturity. The RCF had an unused line fee of 0.50%, subject to a step down to 0.375% per annum if the borrowers' consolidated first lien net leverage ratio was equal to or less than 4.50x on the closing date, with respect to the unused portion of our new revolving credit facility; a per annum letter of credit fee on the aggregate stated amount of each letter of credit available to be drawn equal to the applicable margin for LIBOR rate loans under the RCF; a letter of credit fronting fee equal to 0.125% per quarter on the aggregate stated amount of each letter of credit available to be drawn; and certain other customary fees and expenses. The initial borrowing date was expected to be the closing date of the acquisition (scheduled and ended up being October 1, 2018). After the initial borrowing date, without the consent of the then-existing lenders, the USD and EUR term loan facilities were able to be increased in an aggregate amount not to exceed the sum of greater of $1.200 billion USD and Four Quarter Consolidated earnings before interest, taxes, depreciation, and amortization (EBITDA) or an unlimited amount so long as on a pro forma basis after giving effect to the incurrence of any such incremental loans or increase in the RCF commitments or term loan commitments. The senior secured credit facilities included customary negative covenants and a negative covenant restricting certain activities of Starfruit Holdco B.V and the RCF included a maximum first lien net leverage ratio, to be tested, commencing with the third full fiscal quarter after the closing date, at the end of any quarter when more than 35% of the RCF was drawn. Starfruit Holdco B.V. — a Netherlands-incorporated SPV — and each of its current and future and indirect restricted subsidiaries (with certain exceptions) issued a guarantee in favor of the loans. These loans were secured by (i.e. collateralized against) a first priority lien on substantially all of the assets of Starfruit Holdco B.V., Starfruit Finco B.V., Starfruit US Holdco LLC, Starfruit Swedish Bidco AB, and each of subsidiary guarantors' assets, including their capital stock and the capital stock of each of their and their subsidiary guarantors' direct subsidiaries, including a pledge of the equity interests in Starfruit Finco B.V. held by Starfruit Holdco B.V. These loans were governed under New York law. The proceeds of the $4.30 billion USD and €1.79 billion EUR term loan facilities were to be used to fund, in part, the acquisition, while the $900 million USD RCF was to be used for working capital and other general corporate purposes. The RCF was not expect to draw on our new revolving credit facility on the Closing Date other than a de minimis amount of outstanding letters of credits expected to be issued under the RCF. The loan was initially arranged in April 2018. The USD term loan B was originally launched at $3.9 billion USD before being increased during syndication to $4.34 billion USD. On September 20, 2018, the $4.34 billion USD loan and €1.79 billion EUR began to be traded. Record ID#104541 captures BOC's contribution to the $4.34 billion USD term loan. Record ID#104594 captures BOC's contribution to the €1.79 billion EUR term loan. Record ID#104595 captures BOC's contribution to the $900 million USD RCF. In addition to BOC, the following lenders contributed to the three loans: Barclays Bank PLC, HSBC Bank plc, J.P. Morgan Securities plc, Credit Suisse International (CSi), the London Branch of Deutsche Bank AG, RBC Capital Markets, LLC, Morgan Stanley Bank International Limited, Citigroup Global Markets Inc., Nomura Securities International, Inc., UBS Securities LLC, BNP Paribas Fortis S.A./N.V., Crédit Agricole Corporate and Investment Bank (CACIB), Mizuho Bank, Ltd., MUFG Bank, Ltd., The Royal Bank of Scotland PLC (RBS), the London Branch of Société Générale S.A. (SocGen), ABN AMRO Bank N.V., Allied Irish Banks p.l.c. (AIB), Bank of Ireland plc, Commerzbank AG, ING Group N.V., Coöperatieve Rabobank U.A. (Rabobank), Skandinaviska Enskilda Banken AB (SEB), and Standard Chartered Bank PLC. BOC, Barclays, HSBC, J.P. Morgan Securities, CSi, Deutsche Bank, RBC Capital Markets, Morgan Stanley Bank International, Citigroup Global Markets, Nomura Securities International, UBS Securities, BNP Paribas Fortis, CACIB, Mizuho, MUFG, RBS, and SocGen served as joint bookrunners. Barclays, hSBC, and J.P.Morgan served as the joint global coordinators. J.P.Morgan was the lead left bookrunner. BOC Luxembourg Branch served as the sole China lead arranger, bookrunner, and mandated lead arranger for the three loans. ABN AMRO, AIB, Bank of Ireland, Commerzbank, ING, Rabobank, SEB, and Standard Chartered served as mandated lead arrangers. JPMorgan Chase Bank, N.A. served as administrative agent. JPMorgan was also the sole physical coordinator for the dollar term loan. In addition to the debt, the acquisition was financed by €3.380 billion EUR in cash as common equity from the sponsors and proceeds of notes. AkzoNobel received shareholder approval for the separation of its Specialty Chemicals business on November 30, 2017. The disposal would allow AkzoNobel to become more focused on paints and coatings. The acquisition was subject to customary closing conditions including the relevant regulatory approvals and consultation with the relevant employee representative bodies. It was expected to be completed before the end of 2018. The acquisition was completed on October 1, 2018. The Specialty Chemicals division was renamed as Nouryon after the purchase.