Narrative
Full Description
Project narrative
In October 2016, financial close was reached on a deal in which a syndicate of 23 banks — including the Bank of China (BOC), Shanghai Pudong Development Bank (SPDB), China Merchants Bank Co., Ltd., China Construction Bank (Asia) Corporation (CCB (Asia)), Industrial and Commercial Bank of China (Asia) Limited (ICBC (Asia)), Bank of Communications (BoComm), CMB Wing Lung Bank, Bank of Jiangsu, China CITIC Bank Corporation Limited, Shanghai Rural Commercial Bank Co., Ltd. (SRCB), and China Everbright Bank — entered into a $3.5 billion USD syndicated loan agreement with Inari S.à r.l. — a Luxembourg-incorporated special purpose vehicle (SPV) wholly-owned by Luxembourg-incorporated Nilakka S.à r.l., a wholly-owned subsidiary of Halti S.A., a Luxembourg-incorporated consortium with Cayman Islands-incorporated Hong Kong Stock Exchange-listed Chinese internet company Tencent Holdings Limited as a major shareholder (50% equity stake) and undisclosed other investors as shareholders — to finance the Tencent Holdings-led acquisition of a 84.3% stake in mobile gaming company Supercell Oy. This loan was divided into two tranches: a $3 billion USD term loan tranche and a $500 million USD revolver tranche. This loan carried a maturity period of five years and an interest rate based on LIBOR plus a blended interest margin of 212 basis point (bps). Nilakka S.à r.l. issued a guarantee for the loan, and the loan was secured (i.e. collateralized). Tencent Holdings provided credit enhancements, namely letters of comfort and undertaking, to support the loan. The proceeds were to be used by the borrower to facilitate the acquisition of a 84.3% stake in mobile game maker Supercell Oy. BOC contributed $1 billion USD to the loan in a 6:1 ratio to the term loan and revolver, as the other lenders; $857,142,857.143 USD to the term loan tranche as captured by Record ID#104832 and $142,857,142.85717 to the revolver tranche as captured by Record ID#104833. SPDB contributed $700 million USD to the loan; $600,000,000 USD to the term loan tranche as captured by Record ID#104834 and $100,000,000 USD to the revolver tranche as captured by Record ID#104835. China Merchants Bank contributed $400 million USD to the loan; $342,857,142.857 USD to the term loan tranche as captured by Record ID#104836 and $57,142,857.143 USD to the revolver tranche as captured by Record ID#104837. CCB (Asia) contributed $130 million USD to the loan; $111,428,571.429 USD to the term loan tranche as captured by Record ID#104838 and $18,571,428.571 USD to the revolver tranche as captured by Record ID#104839. ICBC (Asia) contributed $90 million USD to the loan; $77,142,857.1429 USD to the term loan tranche as captured by Record ID#104840 and $12,857,142.8571 USD to the revolver tranche as captured by Record ID#104841. BoComm contributed $80 million USD to the loan; $68,571,428.5714 USD to the term loan tranche as captured by Record ID#104842 and $11,428,571.4286 USD revolver tranche as captured by Record ID#104843. Wing Lung Bank contributed $80 million USD to the loan; $68,571,428.5714 USD to the term loan tranche as captured by Record ID#104844 and $11,428,571.4286 USD revolver tranche as captured by Record ID#104845. Bank of Jiangsu contributed $50 million USD; $42,857,142.8571 USD to the term loan tranche as captured by Record ID#104846 and $7,142,857.1429 USD to the revolver tranche as captured by Record ID#104847. China CITIC Bank contributed $50 million USD; $42,857,142.8571 USD to the term loan tranche as captured by Record ID#104848 and $7,142,857.1429 USD to the revolver tranche as captured by Record ID#104849. SRCB contributed $25 million USD; $21,428,571.4286 USD to the term loan tranche as captured by Record ID#104850 and $3,571,428.5714 USD to the revolver tranche as captured by Record ID#104851. China Everbright Bank contributed $20 million USD; $17,142,857.1429 USD to the term loan tranche as captured by Record ID#104852 and $2,857,142.8571 USD to the revolver tranche as captured by Record ID#104853. In addition to the Chinese state-owned banks, the following lenders contributed to the loan syndicate: Bank of America Merrill Lynch (BAML) ($125 million USD; $107,142,857.143 USD to the term loan tranche and $17,857,142.857 USD to the revolver tranche), Australia and New Zealand Banking Group ($100 million USD; $85,714,285.7143 USD to the term loan tranche and $14,285,714.2857 USD to the revolver tranche), HSBC ($100 million USD; $85,714,285.7143 USD to the term loan tranche and $14,285,714.2857 USD to the revolver tranche), Deutsche Bank ($75 million USD; $64,285,714.2857 USD to the term loan tranche and $10,714,285.7143 USD to the revolver tranche), China Minsheng Bank Corporation (CMBC) ($130 million USD; $111,428,571.429 USD to the term loan tranche and $18,571,428.571 USD to the revolver tranche; $70 million USD from its Beijing office and $60 million USD from Hong Kong), Ping An Bank $90 million USD; $77,142,857.1429 USD to the term loan tranche and $12,857,142.8571 USD to the revolver tranche), Hang Seng Bank Limited ($70 million USD; $60,000,000 to the term loan tranche and $10 million USD to the revolver tranche), King's Town Bank ($70 million USD; $60,000,000 to the term loan tranche and $10 million USD to the revolver tranche), Cathay United Bank ($30 million USD; $25,714,285.7143 to the term loan tranche and $4,285,714.2857 USD to the revolver tranche), KGI Bank ($30 million USD; $25,714,285.7143 to the term loan tranche and $4,285,714.2857 USD to the revolver tranche), State Bank of India (SBI), and Chang Hwa Commercial Bank ($20 million USD; $17,142,857.1429 USD to the term loan tranche and $2,857,142.8571 USD to the revolver tranche). BOC, SPDB, China Merchants Bank, BAML, ANZ, HSBC, and Deutsche served as mandated lead arrangers, bookrunners, and underwriters. CCB (Asia), CMBC Beijing office and the Hong Kong, ICBC (Asia), BoComm, and Wing Lung Bank served as mandated lead arrangers. Ping An, Hang Seng Bank, King's Town Bank, Bank of Jiangsu, and China CITIC Bank served as lead arrangers. Cathay United Bank, KGI Bank, SBI, Chang Hwa, SRCB, and China Everbright served as as arrangers. In July 2016, Tencent entered into an agreement with underwriters for the $3.5 billion USD. General syndication was launched in mid-August 2016 and lasted in six weeks. 16 lenders joined in general syndication, with subscriptions totaling $1.8 billion USD. On June 21, 2016, a special purpose vehicle holding company and consortium led by Tencent signed a definitive agreement to acquire a 84.3% stake in Supercell Oy from shareholders including Japan's SoftBank Group Corp. (owner of a 72.2% stake in Supercell) for $8.6 billion USD. Tencent provided billions in equity investment for the acquisition. Helsinki-headquartered Supercell was founded in 2010 and at the time of acquisition had launched four titles which all were commercial hits, with Supercell becoming the world’s largest standalone mobile games company. Supercell's games include multiplayer Clash Royale, which at the time was number one in terms of revenue, Clash of Clans, a very popular mobile game, Hay Day, and Boom Beach. The acquisition was completed on October 26, 2016. Tencent did not choose to absorb Supercell into its own business, and allowed Supercell to be run as a separate entity (under "maximum management independence") as it had been under SoftBank's ownership. The acquisition was the world's largest buyout of a game developer. On October 21, 2019, Tencent Holdings via a wholly-owned subsidiary acquired 44,000 shares in Halti S.A., increasing its equity voting interest in 51.2% and therefore making Supercell majority-owned by Tencent.
Staff comments
1. A six-month LIBOR was assumed. The average 6-month LIBOR in October 2016 was 1.25886%. Therefore, the interest rate has been coded as 1.25886% + 2.12% (212 bps) = 3.37886%.