Bank of China contributes €76.19 million EUR of the €1.6 billion EUR bridge-to-bond facility of a €4.7 billion EUR syndicated loan to Saipem for refinancing and general corporate purposes (Linked to Record ID#107054)

Project narrative

On December 10, 2015, a syndicate of 21 banks — including the Luxembourg Branch of the Bank of China (BOC) and the Milan Branch of the Industrial and Commercial Bank of China (Europe) S.A. (ICBC (Europe)) — entered into a €4.7 billion EUR ($5.27172 billion USD) syndicated senior credit facilities agreement with Saipem S.p.A. — an Italian multinational oilfield services company doing engineering, construction, and drilling listed on the Borsa Italiana and minority-owned by Italian state-controlled multinational energy Eni S.p.A. — and Saipem Finance International B.V. — a Netherlands-incorporated wholly-owned subsidiary of Saipem International B.V., a Netherlands-incorporated wholly-owned subsidiary of Saipem — for refinancing and general corporate purposes. The facilities were divided into three facilities: a €1.600 billion EUR ($1.79463 billion USD) bridge-to-bond credit line facility with a maturity period of 18 months (1.5 years), an extension option of six months, and a variable interest rate based on a floating rate plus a margin of 80 basis points (bps), rising to 275 bps over time; a €1.500 billion EUR ($1.68246 billion USD) revolving credit facility (RCF) with a maturity period of five years based on a floating rate plus a margin of 80 bps; and a €1.600 billion EUR term loan credit line tranche with a maturity period of five years and a variable interest rate based on a floating rate plus a margin of 110 bps. 13 subsidiaries of Saipem acted as guarantors of the facility. The facility was governed by English law. The proceeds of the bridge-to-bond and term loan facilities were used by the borrower to refinance its current indebtedness to Eni, while the proceeds of the RCF was to be used by the borrower to meet its financial needs as liquidity, as Saipem ceased to be a subsidiary of Eni. In addition to BOC and ICBC (Europe), the following lenders contributed to the loan syndicate: Intesa Sanpaolo S.p.A., the Milan Branch of Citibank N.A., Deutsche Bank Luxembourg S.A, Mediobanca - Banca di Credito Finanziario S.p.A., UniCredit S.p.A., Goldman Sachs International Bank, the Milan Branch of JPMorgan Chase Bank, N.A., ABN AMRO Bank N.V., the Italian Branch of BNP Paribas S.A., the London Branch of DNB Bank ASA, the Milan Branch of HSBC Bank plc, the Milan Branch of ING Bank N.V., Standard Chartered Bank plc, Unione di Banche Italiane S.p.A. (UBI Banca), Banca Monte dei Paschi di Siena S.p.A. (BMPS), Banca Popolare Di Milano (Banco BPM) S.p.A., the Milan Branch of Banco Santander, S.A., the Milan Branch of Mizuho Bank, Ltd. and Banca Popolare di Sondrio S.C.p.A. (BPSO). Each lender, including BOC and ICBC (Europe), contributed approximately €76,190,476.1905 EUR ($85.46 million USD) to the €1.6 billion EUR bridge-to-bond credit line facility. Record ID#107053 captures BOC's contribution. Record ID#107054 captures ICBC (Europe)'s contribution. Each lender, including BOC and ICBC (Europe), contributed €71,428,571.4286 EUR ($80.12 million USD) to the €1.5 billion EUR RCF. Record ID#107055 captures BOC's contribution. Record ID#107056 captures ICBC (Europe)'s contribution. Each lender, including BOC and ICBC (Europe), contributed €76,190,476.1905 EUR to the €1.6 billion EUR term loan credit line facility. Record ID#107057 captures BOC's contribution. Record ID#107058 captures ICBC (Europe)'s contribution. On October 27, 2015, Saipem entered into a letter of mandate with a consortium of banks for the loan. Banca IMI S.p.A., Citigroup Global Markets Limited, the London Branch of Deutsche Bank, Mediobanca - Banca di Credito Finanziario and UniCredit served as mandated lead arrangers and bookrunners. Citigroup Global Markets Limited and Mediobanca served as documentation agents. Banca IMI S.p.A. served as agent. Goldman Sachs International and J. P. Morgan Ltd served as joint lead arrangers. The original lenders were Intesa Sanpaolo, the Milan Branch of Citibank, Deutsche Bank AG, Filiale Luxembourg, Mediobanca, UniCredit, Goldman Sachs International Bank, and the Milan Branch of JPMorgan Chase Bank. Syndication was launched on November 2, 2015, leading to substantial oversubscription and scale-back of the original commitments provided by the underwriters and joint lead arrangers, which was completed on December 11, 2015. In syndication, the Luxembourg Branch of BOC, ABN AMRO Bank, the Italian Branch of BNP Paribas, the London Branch of DNB, the Milan Branch of HSBC, the Milan Branch of ING Bank, and Standard Chartered joined as mandated lead arrangers. UBI Banca joined as lead arranger. ICBC (Europe), BMPS, Banco BPM, Banco Santander, Mizuho, and BPSO served as co-arrangers. This was the borrower's debut loan syndication. The drawdown of the facilities was contingent on the completion of the capital increase of up to €3.5 billion EUR, announced on October 27, 2015. The drawdown was approved by the shareholders on December 2, 2015. On January 21, 2016, following the resolution of the Board of Directors, Saipem entered into an underwriting agreement with the 11 underwriting consortium banks, where the underwriters severally undertook to subscribe any newly-issued Saipem shares not taken after the expiry of the final term for exercising the stock options. On February 26, 2016, €3.2 billion EUR was disbursed under the term loan and bridge-to-bond facilities of the €4.7 billion EUR facility, which Saipem used to fully repay its debt to Eni. In December 2016, the borrower fully repaid the €1.6 billion EUR bridge-to-bond facility. On March 29, 2017, Saipem issued fixed-rate bonds for €500 million EUR, which it used to prepay €500 million EUR of the €1.6 billion EUR term loan tranche. On July 31, 2017, Saipem repaid €525 million EUR of the term loan tranche, using €300 million EUR of cash and €225 million EUR drawdown under a loan guaranteed by Atradius. On October 27, 2017, Saipem issued fixed-rate bonds for €500 million EUR, which it used, along available cash, to repay the remaining balance of the €1.6 billion EUR term loan tranche. On July 27, 2018, a syndicate of 17 banks entered into an amendment with Saipem to amend the €1.5 billion EUR RCF; in the amendment, the borrowers reduced the RCF to €1 billion EUR and extended the maturity period by three-and-a-half years — for a new maturity period of 8.5 years — now maturing in July 2023.