Bank of China contributes $85 million USD to a $750 million USD syndicated revolving credit facility to News Corporation for general corporate purposes

Project narrative

On December 12, 2019, a syndicate of 13 lenders — including the New York Branch of the Bank of China (BOC) — entered into a $750,000,000 USD syndicated revolving credit facility (RCF) agreement with News Corporation — a Delaware-incorporated American mass media and publishing company headquartered in Manhattan, New York City, New York, traded on the Nasdaq Stock Exchange and Australian Securities Exchange and with the Murdoch family as significant shareholders — for general corporate purposes. This unsecured RCF carried a maturity period of five years with a two one-year extension options at each lender's discretion and a final maturity date of December 12, 2024 and a variable interest rate based on either a eurodollar rate (LIBOR, or, in non-LIBOR currencies, the local screen rate) or a base rate (being the highest of a prime rate, the New York Federal Reserve Bank rate plus 0.50%, or a one-month LIBOR plus 1% for U.S. dollar debt; for the Canadian debt, the base rate was the highest of the Canadian base rate or the one-month CDOR rate plus 1%) plus a margin based on the borrower's adjusted operating income net leverage ratio ranging from 1.375% for LIBOR loans and 0.375% for base rate loans a ratio less than 1.0x to 2.25% for LIBOR loans and 1.25% for base rates loans for a ratio greater than or equal to 2.25%. The commitment fee was based on the borrower's adjusted operating income net leverage ratio ranging from 0.20% a ratio less than 1.0x to 0.300% for a ratio greater than or equal to 2.25%. At signing, the ratio was less than 1.0x, so the margin was 1.375% for LIBOR loan and 0.375% for base rate loans and the commitment fee was 0.20%. The RCF was available to be transferred to subsidiary borrowers. This RCF included a $100,000,000 USD sublimit for issuances of letters of credit and a request option for an up-sizing of $250,000,000 USD. This RCF included a financial covenant that the borrower must maintain an adjusted operating income net leverage ratio of not more than 3.0 to 1.0 and a net interest coverage ratio of not less than 3.0 to 1.0 and negative covenants limiting the borrower and its subsidiaries from engaging in transactions with affiliates, incur liens, merge into or consolidate with other entities, incur subsidiary debt, or dispose of substantially all of its assets. The proceeds were to be used by the borrower for general corporate purposes; concurrent with entry, an existing October 2013 $650 million USD RCF was terminated. BOC contributed $85,000,000 USD to the loan syndicate, as captured by Record ID#106646. In addition to BOC, the following lenders contributed the respective amounts to the loan syndicate: JPMorgan Chase Bank, N.A. ($85,000,000 USD), Bank of America, N.A. ($85,000,000 USD), Citibank, N.A. ($85,000,000 USD), Goldman Sachs Bank USA ($60,000,000 USD), HSBC Bank USA, N.A. ($60,000,000 USD), the New York Branch of Deutsche Bank AG ($60,000,000 USD), Australia and New Zealand Banking Group Limited (ANZ) ($42,500,000 USD), Commonwealth Bank of Australia (CBA) ($42,500,000 USD), Westpac Banking Corporation ($42,500,000 USD), National Australia Bank Limited (NAB) ($42,500,000 USD), Morgan Stanley Bank, N.A. ($30,000,000 USD), and MUFG Bank, Ltd. ($30,000,000 USD). JPMorgan Chase Bank, Bank of America, and Citibank each had a letter of credit sublimit for their commitment ($33,333,333.34 USD for JPMorgan Chase, $33,333,333.33 USD for Bank of America and Citibank). JPMorgan Chase Bank served as administrative agent. BOC NY Branch, BofA Securities, Inc., and Citibank served as syndication agents. JPMorgan Chase Bank, BofA Securities, Citibank, and the NY Branch of BOC served as joint lead arrangers and joint bookrunners. Goldman Sachs Bank USA, HSBC Securities (USA) Inc., Morgan Stanley Senior Funding, Inc., MUFG Bank, and Deutsche Bank Securities Inc. served as joint lead arrangers. As of June 30, 2020, the borrower had not drawn funds under the RCF. As of June 30, 2021, the borrower had not drawn funds under the RCF. On March 29, 2022, a syndicate of 13 lenders — including the New York Branch of BOC — entered into a $1,250,000,000.00 syndicated facility agreement with News Corporation for general corporate and refinancing purposes. This facility was divided into two tranches: a $500,000,000.00 USD term loan A credit facility and a $750,000,000.00 USD RCF. Both tranches were unsecured and carried maturity periods of five years and a final maturity date of March 31, 2027, though the RCF featured two one-year extension options and the term loan A facility featured an option, under certain circumstances, to extend the maturity by at least one year. The term loan A tranche was to amortize in equal quarterly installments in an aggregate annual amount equal to 0.0%, 2.5%, 2.5%, 5.0% and 5.0%, respectively, of the original principal amount of the Term A Facility for each 12-month period commencing on June 30, 2022. The facility carried a variable interest rate based on either Term SOFR (SOFR plus 0.10% for one-month and three-month interest periods or 0.25% for six-month interest periods), EURIBOR for euro loans, CDOR for Canadian dollar loans, BBSY for Australian dollar loans, and SONIA for British pound sterling, or a base rate (being the highest of a prime rate, the Federal Funds Rate plus 0.50%, Term SOFR, or 1.00%) plus a margin based on the borrower's adjusted operating income net leverage ratio ranging from 1.375% for LIBOR loans and 0.375% for base rate loans a ratio less than 1.0x to 2.25% for LIBOR loans and 1.25% for base rates loans for a ratio greater than or equal to 2.25%. The commitment fee was based on the borrower's adjusted operating income net leverage ratio ranging from 0.20% a ratio less than 1.0x to 0.300% for a ratio greater than or equal to 2.25%. At signing, the ratio was less than 1.0x, so the margin was 1.375% for relevant rate loans and 0.375% for base rate loan and the commitment fee was 0.20% (for SOFR, 1.475% when including the adjustment). The RCF was available to be transferred to subsidiary borrowers. The RCF included a $100,000,000 USD sublimit for issuances of letters of credit. The entire facility had a built-in request for an up-sizing of $250,000,000 USD. This facility included a financial covenant that the borrower must maintain an adjusted operating income net leverage ratio of not more than 3.0 to 1.0 and a net interest coverage ratio of not less than 3.0 to 1.0 and negative covenants limiting the borrower and its subsidiaries from engaging in transactions with affiliates, incur liens, merge into or consolidate with other entities, incur subsidiary debt, or dispose of substantially all of its assets. The proceeds were to be used by the borrower for general corporate purposes and to finance the existing December 2019 $750 million USD RCF, which was concurrently terminated with the new facility. BOC committed $100,000,000.00 USD to the $750 million USD RCF tranche, as captured by Record ID#106647. On March 31, 2022, the borrower drew down the full $500 million USD Term A Facility, but not any of the RCF. As of June 30, 2022, the borrower had not drawn funds under the RCF. As of June 30, 2023, the borrower had not drawn funds under the RCF. BOC's participation in the 2022 facility received criticism from a piece in Australian website Crikey, citing how Murdoch family-controlled outlets such as Fox News and Sky News Australia had viscously criticized the Chinese government, but Murdoch-run News Corporation was willing to borrow from state-owned BOC, as evidence of hypocrisy and the Murdochs being influenced by the Chinese government.