Narrative
Full Description
Project narrative
On February 10, 2020, financial close was reached on a deal in which a syndicate of 22 banks — including Bank of China, New York Branch, and Industrial and Commercial Bank of China Ltd, New York Branch — entered into a $1,750,000,000 USD unsecured term loan agreement with Carrier Global Corporation, a Delaware-based multinational company specializing in heating, ventilation, air conditioning (HVAC), refrigeration, fire, and security solutions. The loan facility is intended for general corporate purposes. The maturity of the loan is three years, with a scheduled maturity date of February 10, 2023, and the interest rate is based on LIBOR plus an applicable margin, depending on the borrower’s credit rating. A commitment fee of 0.125% is charged on unused commitments. The proceeds of the loan were used to to distribute $10.9 billion to United Technologies Corporation (UTC) to support Carrier's separation from UTC. While Bank of China (Record ID#105084) and ICBC (Record ID#105083) contributed to this loan, others also participated, including Goldman Sachs Bank USA, Morgan Stanley Bank, N.A., UniCredit Bank AG (New York Branch), Bank of Montreal (Chicago Branch), BNP Paribas, Deutsche Bank AG (New York Branch), Intesa Sanpaolo S.p.A. (New York Branch), Mizuho Bank, Ltd., MUFG Bank, Ltd., Sumitomo Mitsui Banking Corporation, Wells Fargo Bank, National Association, Bayerische Landesbank (New York Branch), Commerzbank AG (New York Branch), Royal Bank of Canada, Societe Generale, Standard Chartered Bank, The Bank of New York Mellon, Westpac Banking Corporation, Citibank, N.A., and HSBC Bank USA, National Association. On March 27, 2020, Carrier drew the full $1.75 billion available, and in the three months ended December 31, 2020, the company fully prepaid the $1.75 billion outstanding under the Term Loan Credit Facility. On the same day, a revolving credit facility was also signed between Carrier Global and the lenders (Record ID#105079 and #105080). On June 2, 2020, both the Revolving credit agreement and the term loan were amended.
Staff comments
1. Carrier Global Corporation is a Delaware-incorporated American multinational heating, ventilation, and air conditioning, refrigeration, and fire and security equipment corporation based in Palm Beach Gardens, Florida. Carrier was origially acquired by United Technologies in 1979, but it was spun off as an independent company 41 years later in 2020. The company is listed on New York Stock Exchange. 2. AidData estimates the interest rate by adding the 6-month average LIBOR rate and the applicable rate based on ratings. Based on the company’s credit ratings in February 2020, 1.25% interest was added to the LIBOR rate in February 2020 (1.25%+1.68%=2.93%). 3. The individual contribution of the 22 lenders to these two USD-denominated revolving credit agreement worth $1.75 billion USD is unknown. For the time being, AidData has estimated the contributions of Bank of China (New York Branch) and ICBC by assuming that each lender contributed an equal amount ($79,545,454.55 USD) to the loan syndicate.