Narrative
Full Description
Project narrative
On August 30, 2013, Sociedade Nacional de Combustiveis de Angola (Sonangol) — Angola's state-owned oil company — signed a $2.5 billion syndicated pre-export term facility (loan) agreement with 24 banks. Members of the syndicate included ICBC, Natixis, BNP Paribas, Deutsche Bank, Bank of Tokyo Mitsubishi-UFJ (BTMU), and Standard Chartered Bank. The loan carries a 5-year maturity and an interest rate of 6-month LIBOR plus a 3.5% margin. The loan was secured by (i.e. collateralized against) Sonangol’s receivables from exports of oil to China. The (principal) amount outstanding under this loan was AOA 158,653,133,333,000 ($1,166,670,098) as of December 31, 2015, AOA 111,151,999,931,000 ($817,366,237) as of December 31, 2016, and AOA 0 ($0) as of December 31, 2017.
Staff comments
1. AidData has estimated the all-in interest rate by adding 3.5% to average 6-month LIBOR in August 2013 (0.39493%). 2. A pre-export finance (PXF) facility an arrangement in which a commodity (e.g. oil) producer gets up-front cash from a customer in return for a promise to repay the customer with that commodity (possibly at a discount) in the future. PXF funds may be advanced by a lender or syndicate of lenders to a commodity producer to assist the company in meeting either its working capital needs (for example, to cover the purchase of raw materials and costs associated with processing, storage and transport) or its capital investment needs (for example, investment in plant and machinery and other elements of infrastructure). PXF facilities are usually secured by (1) an assignment of rights by the producer under an ‘offtake contract’ (i.e., a sale and purchase contract between the producer and a buyer of that producer of goods or commodities), and (2) a collection account charge over a bank account into which proceeds due to the producer from the buyer of the goods or commodities under the offtake contract are credited. There are two key documents in prepayment finance transactions: a contract providing for the advance payment by the offtaker to the producer for the purchase of goods/commodities (the 'Prepayment Contract'), and a loan agreement between a lender and the offtaker (the 'Offtaker Loan Agreement') under which the advance payment is financed. 3. The loan is also known as a receivables purchase agreement facility. 4. The amount outstanding figures are based on an exchange rate of 1 USD: 135,988 AOA. 5. At the time that the transaction was finalized, Michel Jay, global head of energy and commodities structured finance at Natixis, said that banks were attracted to receivables purchase agreement facilities with Sonangol because of the quality of the borrower, but also because of the knowledge that existed in the market as to how the deals would be structured. He said ‘[t]hey introduced a lending structure in 2006 and it’s the same every year, a receivable purchase agreement that doesn’t change from one year to the other. People in the market know how it’s structured.’ 6. The size of ICBC’s contribution to the lending syndicate is unknown. For the time being, AidData assumes equal contributions across the 22 known members of the syndicate ($104,166,666).