ICBC contributes to a £600 million GBP syndicated revolving credit facility to Melrose for refinancing purposes

Project narrative

On December 22, 2011 a syndicate of 10 banks — including the Industrial and Commercial Bank of China (ICBC) — entered into a £600 million GBP syndicated multi-currency revolving credit facility (RCF) agreement with Melrose plc (later known as Melrose Industries plc) — an United Kingdom-incorporated private equity firm, acquisition vehicle, and buyer of industrial companies listed on the London Stock Exchange — for refinancing purposes. This loan carried a maturity period of five years and an interest rate based on a reference rate plus a margin determined by reference to Melrose's performance under its debt cover covenant ratio, ranging from 1.20% to 2.00%. This RCF had a change of control provision where a takeover of the borrower would oblige the lenders and borrower to enter into negotiations whether to continue the RCF, with the lenders with the option to cancel the RCF 30 days after change of control. A number of Melrose plc-controlled companies issued guarantees for this RCF. The proceeds of the RCF were drawn down and used by the borrower on January 31, 2012 to repay all amounts outstanding amounts under a £750 million GBP multi-currency facility maturing on April 22, 2013. In addition to ICBC, the following lenders contributed to the loan syndicate: Bank of America Merrill Lynch (BAML), Barclays Bank Plc, HSBC Bank PLC, JPMorgan Chase Bank, N.A., Lloyds Banking Group, RBC Capital Markets, Royal Bank of Scotland (RBS), Banco Santander, S.A., and Wells Fargo Bank N.A. All these lenders served as mandated lead arrangers. On June 29, 2012, a syndicate of lenders signed a £1.5 billion GBP syndicated multi-currency bank facility with Melrose; then, on August 23, 2012, the borrower drew down to fully repay the £600 million GBP syndicated RCF and to finance the acquisition of Elster.