Agricultural Bank of China contributes $75 million USD to the three-year $6 billion USD tranche of a $12 billion USD syndicated term loan to Verizon Communications to support its acquisition of Vodafone Group Plc's indirect 45% interest in Verizon Wireless (Linked to Record ID#106653 and #106655)

Project narrative

On October 1, 2013, a syndicate of 47 banks — including the New York Branch of the Agricultural Bank of China (ABC), the New York Branch of the Bank of China (BOC), and the New York Branch of Bank of Communications Co., Ltd. (BoComm) — entered into a $12,000,000,000 USD syndicated term loan credit agreement with Verizon Communications Inc. — a Delaware-incorporated American telecommunications company headquartered in New York City, New York listed on the New York Stock Exchange — to support its acquisition of Vodafone Group Plc's indirect 45% interest in Cellco Partnership (Verizon Wireless). This loan was divided into two tranches: a $6,000,000,000 USD tranche with a maturity period of three years and a $6,000,000,000 USD tranche with a maturity period of five years. All debt was to be drawn in a single borrowing on the funding date (once the conditions for the acquisition was met), with borrowings allocated on a pro-rata basis between the two loans (equal, since both tranches were equal to each other). Borrowings under the loan carried a variable interest rate based on either the base rate (defined as the highest of the administrative agent's prime rate or the federal funds rate plus 0.50%, subject to a floor of LIBOR plus 1.00%) or LIBOR at the borrower's option plus a margin dependent on the borrower's credit ratings from Moody's and S&P. For the three-year tranche, the margin ranged from 0.125% for base rate loans and 1.125% for LIBOR loans if the rating was greater than or equal to A- or A3 to 0.875% for base rate loans and 1.875% for LIBOR loans if the rating was less than BBB or Baa2. For the five-year tranche, the margin ranged from 0.25% for base rate loans and 1.25% for LIBOR loans if the rating was greater than or equal to A- or A3 to 1.00% for base rate loans and 2.00% for LIBOR loans if the rating was less than BBB or Baa2. The five-year tranche carried an amortization schedule of 5.0% the original principal amount on each of the dates falling three, six, nine and twelve months after the third anniversary of the funding date (a grace period of 3.25 years) and 12.5% of the original principal amount tranche falling on the dates that were three, six and nine months after the fourth anniversary of the funding date. This loan carried a commitment fee of 0.10% per annum on the daily actual unused commitment of each lender for the period from and including October 1, 2013 through the date on which the commitments are terminated. The loan was available, subject to satisfaction of conditions, from October 1, 2013 to the earliest of September 2, 2014 or the date immediately after the completion of the acquisition or the termination of the stock purchase agreement or the termination of the loan agreement. The loan carried a financial covenant to maintain a leverage ratio not in excess of 3.50:1.00 until the borrower's credit ratings reached a certain level, negative covenants, including a negative pledge covenant, a merger or similar transaction covenant, an accounting changes covenant, affirmative covenants, and customary events of default. ABC committed $75,000,000 USD, BOC committed $40,000,000 USD, and BoComm committed $12,500,000 USD to the both of the three-year and five-year tranches ($150,000,000 USD total for ABC, $80,000,000 USD for BOC, and $25,000,000 USD for BoComm). Record ID#106651 captures ABC's commitment to the three-year tranche. Record ID#106652 captures ABC's commitment to the five-year tranche. Record ID#106653 captures BOC's commitment to the three-year tranche. Record ID#106654 captures BOC's commitment to the five-year tranche. Record ID#106655 captures BoComm's commitment to the three-year tranche. Record ID#106656 captures BoComm's commitment to the five-year tranche. In addition to these three Chinese state-owned banks, the following lenders committed the respective amounts to each of the tranches JPMorgan Chase Bank, N.A. ($350,000,000 USD; $700,000,000 USD in total), Morgan Stanley Bank, N.A. ($350,000,000 USD; $700,000,000 USD in total), Bank of America, N.A. ($350,000,000 USD; $700,000,000 USD in total), Barclays Bank PLC ($350,000,000 USD; $700,000,000 USD in total), CoBank, ACB ($362,500,000 USD; $725,000,000 USD in total), Mizuho Bank, Ltd. ($300,000,000 USD; $600,000,000 USD in total), The Bank of Tokyo-Mitsubishi UFJ, Ltd. (BTMU) ($300,000,000 USD; $600,000,000 USD in total), The Royal Bank of Scotland plc (RBS) ($300,000,000 USD; $600,000,000 USD in total), Wells Fargo Bank, N.A. ($300,000,000 USD; $600,000,000 USD in total), Citibank, N.A. ($250,000,000 USD; $500,000,000 USD in total), the Cayman Islands Branch of Credit Suisse AG ($250,000,000 USD; $500,000,000 USD in total), Royal Bank of Canada (RBC) ($250,000,000 USD; $500,000,000 USD in total), the New York Branch of Deutsche Bank AG ($200,000,000 USD; $400,000,000 USD in total), Sovereign Bank, N.A. ($200,000,000 USD; $400,000,000 USD in total), Compass Bank ($125,000,000 USD; $250,000,000 USD in total), Sumitomo Mitsui Banking Corporation (SMBC) ($125,000,000 USD; $250,000,000 USD in total), Bank of America, N.A. ($100,000,000 USD; $200,000,000 USD in total), BNP Paribas S.A. ($100,000,000 USD; $200,000,000 USD in total), Lloyds Bank plc ($100,000,000 USD; $200,000,000 USD in total), TD Bank, N.A. ($100,000,000 USD; $200,000,000 USD in total), The Bank of New York Mellon ($100,000,000 USD; $200,000,000 USD in total), U.S. Bank National Association ($100,000,000 USD; $200,000,000 USD in total), PNC Bank, National Association ($75,000,000 USD; $150,000,000 USD in total), Aozora Bank, Ltd. ($62,500,000 USD; $125,000,000 USD in total), DNB Capital LLC ($62,500,000 USD; $125,000,000 USD in total), Fifth Third Bank ($62,500,000 USD; $125,000,000 USD in total), Intesa Sanpaolo S.p.A ($62,500,000 USD; $125,000,000 USD in total), Mediobanca International (Luxembourg) S.A. ($62,500,000 USD; $125,000,000 USD in total), The Bank of Nova Scotia (Scotiabank) ($62,500,000 USD; $125,000,000 USD in total), The Northern Trust Company ($62,500,000 USD; $125,000,000 USD in total), Capital One, N.A. ($50,000,000 USD; $100,000,000 USD in total), Regions Bank ($50,000,000 USD; $100,000,000 USD in total), Crédit Industriel et Commercial (CIC) ($37,500,000 USD; $75,000,000 USD in total), Raymond James Bank, N.A. ($37,500,000 USD; $75,000,000 USD in total), Manufacturers and Traders Trust Company ($25,000,000 USD; $50,000,000 USD in total), Sabadell United Bank, N.A. ($25,000,000 USD; $50,000,000 USD in total), State Street Bank and Trust Company ($25,000,000 USD; $50,000,000 USD in total), Synovus Bank ($25,000,000 USD; $50,000,000 USD in total), the New York Branch of The Bank of East Asia, Ltd. (BEA) ($25,000,000 USD; $50,000,000 USD in total), Webster Bank, N.A. ($25,000,000 USD; $50,000,000 USD in total), Bank Hapoalim B.M. ($17,500,000 USD; $35,000,000 USD in total), Stifel Bank & Trust ($17,500,000 USD; $35,000,000 USD in total), the New York Branch of Chang Hwa Commercial Bank, Ltd. ($12,500,000 USD; $25,000,000 USD in total), Manufacturers Bank ($12,500,000 USD; $25,000,000 USD in total), and Mercantil Commercebank N.A. ($12,500,000 USD; $25,000,000 USD total). JPMorgan Chase Bank served as administrative agent. J.P. Morgan Securities LLC and Morgan Stanley Senior Funding, Inc. served as global coordinators. Morgan Stanley Senior Funding, Inc. served as syndication agent. Bank of America and Barclays Bank served as documentation agents. J.P. Morgan Securities, Morgan Stanley Senior Funding, Barclays Bank, and Merrill Lynch, Pierce, Fenner & Smith Incorporated served as joint lead arrangers and joint bookrunners. The proceeds were to be used by the borrower to finance, in part, its acquisition of the indirect 45% interest of Vodafone Group Plc in Cellco Partnership — a Delaware-incorporated joint venture doing business as Verizon Wireless formed in 2000 via the combination U.S. wireless operations and interests of Verizon and Vodafone, with the other 55% owned by Verizon — via the acquisition of all the issued and outstanding capital stock of Vodafone Americas Finance 1 Inc., a subsidiary of Vodafone 4 Limited, pursuant to the stock purchase agreement entered into on September 2, 2013 among Verizon, Vodafone, and Vodafone 4 and to pay related fees and expenses for a consideration of approximately $130 billion USD. The $12 billion USD allowed Verizon to terminate a $60 billion USD bridge credit loan from September 2, 2013. Verizon Wireless's wireless networked served 500 long-term evolution (LTE) markets and 300 million people (95% of the American population). It was the largest 4G LTE network in the United States. The consideration was paid by $58.89 billion USD in cash (including the bank debt), the issuance of Verizon common stock with a value of approximately $60.15 billion USD at $0.10 USD per share, the issuance of $5.0 billion USD of senior unsecured Verizon notes, the selling of Verizon's indirect 23.1% interest in Vodafone Omnitel N.V for $3.5 billion USD, and other consideration of $2.5 billion USD On January 28, 2014, the shareholders of Vodafone and Verizon approved the takeover. The acquisition of the 45% stake was completed on February 21, 2014. This was the third-largest acquisition in corporate history. Concurrent with the acquisition, the borrower drew down $6.6 billion USD during the term loan. In June 2014, Verizon issued $3.3 billion USD of fixed and floating rate notes. The net proceeds were used to repay the three-year tranche on June 12, 2014. In July 2014, the lending syndicate entered into an amendment and restatement agreement with the borrower to refinance the remaining $3.3 billion USD of the five-year tranche; this new loan had a lower interest rate and required lower amortization payments in 2017 and 2018.