Narrative
Full Description
Project narrative
On January 4, 2019, WOM S.A. -- a private telecommunications company headquartered in Chile -- obtained a long-term loan from China Development Bank (CDB) for $125 million. The proceeds of the loan were to be used to finance WOM's infrastructure investment plan. The loan carried an interest rate of LIBOR plus a 3.5% margin and an8-year maturity (final maturity date: January 2027). Then, on November 26, 2019, WOM S.A. prepaid the full amount outstanding on the January 4, 2019 loan, as well as two other loans from CDB to WOM. The pre-payment consisted of $359,888,000 in remaining principal and $5,468,000 in accrued interest, break costs, and a prepayment premium. The prepayment was made using proceeds from a $200 million loan and a bond issuance by SPV Kenbourne Invest S.A. guaranteed by WOM S.A. and its holding company, WOM Mobile. The two other loans pre-paid in November 2019 were committed in January 2016 (and were worth $145 million each). The first, captured via Record ID#103708, carried an interest rate of LIBOR plus a 4% margin and had a final maturity date in August 2025. The second, captured via Record ID#104762 carried an interest rate of LIBOR plus a 3.75% margin and had a final maturity date in August 2026.
Staff comments
1. WOM S.A. is a telecommunications company headquartered in Chile and 92% owned by Novator Partners LLP, a British firm. Novator acquired Nextel Chile SA's assets in 2015, dissolving Nextel Chile in July 2015 and re-branding it as WOM. 2. AidData has calculated the all-in interest rate for this loan by taking the average 6-month LIBOR for the month in which the loan was signed (January 2019), 2.84812%, and added the 3.5% margin. This results in an all-in interest rate of 6.34812%. 3. One observer indicated that the '[CDB] loans require WOM to grant Huawei preferred network partnerships.' However, AidData has not identified additional evidence to corroborate this claim.