Narrative
Full Description
Project narrative
On May 19, 2023, financial close was reached on a deal in which a syndicate of two Chinese banks — including Bank of China, New York Branch and Industrial and Commercial Bank of China Ltd, New York Branch — entered into a $500,000,000 USD syndicated revolving credit agreement with Carrier Global Corporation, a Delaware-based multinational company specializing in heating, ventilation, air conditioning (HVAC), refrigeration, fire, and security solutions, for general corporate purposes. The maturity of the loan is 364 days, with a scheduled maturity date of May 18, 2024, and the interest rate is based on the Term SOFR Rate plus 0.10% and a ratings-based margin. Borrowings under the Revolving Credit Facility are available in U.S. Dollars. This loan supports Carrier Global’s commercial paper program and cash requirements. The proceeds were used by the borrower for general corporate purposes, including working capital and capital expenditures. While Bank of China (Record ID#105124) and Industrial and Commercial Bank of China(Record ID#105125) contributed to this loan, other lenders, including JPMorgan Chase Bank, N.A., Bank of America, Citibank, Barclays Bank PLC, Goldman Sachs Bank USA, Morgan Stanley Bank, N.A., BNP Paribas, Deutsche Bank AG New York Branch, Intesa Sanpaolo S.p.A., Mizuho Bank, Ltd., MUFG Bank, Ltd., Sumitomo Mitsui Banking Corporation, UniCredit Bank AG New York Branch, Wells Fargo Bank, N.A., Bank of Montreal Chicago Branch, Bayerische Landesbank New York Branch, Commerzbank AG New York Branch, Societe Generale, and Standard Chartered Bank also participated. As of March 31, 2024, there were no borrowings outstanding under the Revolver. On May 17, 2024, the lender refinanced and replaced the agreement with another 364-day senior unsecured revolving credit agreement worth $500 million USD. This new credit agreement supports the cash requirements of the Company. Borrowings under the Credit Agreement may be made in either U.S. Dollars or Euros. For U.S. Dollar borrowings, interest can be charged at either the Term SOFR Rate plus 0.10% and a ratings-based margin, or alternatively at the Alternate Base Rate plus a ratings-based margin. Euro borrowings bear interest at the Adjusted EURIBOR Rate plus a ratings-based margin. The exact same banks participated. While Bank of China contributed $10 million USD (Record ID#105127), ICBC also contributed $10 million USD (Record ID#105128).
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 SOFR rate, 0.1% adjustment rate, and the applicable rate based on ratings. Based on the company’s credit ratings in May 2023, 1.25% interest was added to the SOFR rate. (1.25%+0.1%+5.05%=6.4%). 3. The individual contribution of the 22 lenders to these two USD-denominated revolving credit agreement worth $500 million 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 ( $22,727,272.73 USD) to the loan syndicate. 4. In 2024, BOC and ICBC contributed $10 million USD to the loan that refinanced this loan; the number of lenders and face value remained the same. It is very plausible that BOC and ICBC's 2023 contributions were $10 million USD, but AidData has not able to find a corroborating source. This issue merits further investigation.