ICBC contributes to a $2.25 billion USD syndicated loan to AT&T for general corporate purposes and to finance its acquisition of Time Warner Inc.

Project narrative

On September 29, 2017, a syndicate of seven banks — including the New York Branch of the Industrial and Commercial Bank of China (ICBC) — entered into a $2,250,000,000 USD syndicated term loan credit agreement with AT&T Inc. — a Delaware-incorporated American multinational telecommunications holding company headquartered in Dallas, Texas and listed on the New York Stock Exchange — for general corporate purposes. This loan was divided into three tranches: a $750 million USD term loan facility tranche known as 'Tranche A' with a maturity period of three years; a $750 million USD term loan facility tranche known as 'Tranche B' with a maturity period of four years; and a $750 million USD term loan facility tranche known as 'Tranche C' with a maturity period of five years, all maturities coming after the drawdown date. Borrowings under the loan carried interest rates based on a floating rate, that at the borrower's discretion was either a variable annual base rate (the highest of the base rate of the Bank of Nova Scotiabank, 0.5% per annum above the federal funds rate, or LIBOR applicable to U.S. dollars for a period of one month plus 1.00% per annum) or LIBOR for a period of three or six months, plus a margin. The margin was dependent on the borrower's public debt rating, ranging from 0.8750% to 1.250% for Tranche A LIBOR borrowings and 0.000% to 0.1250% for Tranche A base rate borrowings, 0.9375% to 1.1875% for Tranche B LIBOR borrowings and 0.000% to 0.1875% for Tranche B base rate borrowings, and 1.0000% to 1.2500% for Tranche C LIBOR borrowings and 0.000% to 0.2500% for Tranche C base rate borrowings. The borrower's rating at signing and drawing qualified it for 0.8750% for Tranche A, 0.9375% for Tranche B, 1.0000% for Tranche for LIBOR and 0.000% for all three tranches for base rate borrowings). The borrower was obligated to a ticking (commitment) fee on the commitments of the facility at a rate of 0.070%. The obligation to advance funds under the credit agreement had an expiry date of January 31, 2018. The proceeds were to be used by the borrower and its subsidiaries for general corporate purposes. Record ID#107962 captures ICBC's contribution. In addition to ICBC, the following lenders contributed to the loan syndicate: the Bank of Nova Scotia (Scotiabank), Scotiabank (Ireland) Designated Activity Company, Sumitomo Mitsui Banking Corporation (SMBC), Citizens Bank, N.A., HSBC Bank USA, National Association, and Standard Chartered Bank plc. Scotiabank served as the administrative agent. Scotiabank, SMBC, and the New York Branch of ICBC served as joint lead arrangers and joint bookrunners. SMBC served as the syndication agent, The New York Branch of ICBC served as the documentation agent. Citizens Bank, N.A., HSBC Securities (USA) Inc., and Standard Chartered Bank served as mandated lead arrangers. As of December 31, 2017, no amounts were outstanding under the facility. On January 26, 2018, the borrower drew down the entire $2.250 billion USD facility to finance its acquisition of Time Warner. On October 22, 2016, AT&T Inc. — a Delaware-incorporated American multinational telecommunications holding company headquartered in Dallas, Texas and listed on the New York Stock Exchange — entered into an Agreement and Plan of Merger with Delaware-incorporated Time Warner Inc., an American multinational entertainment and mass media company based in New York City, New York, in which AT&T would acquire 100% of the issued and outstanding common stock in Timer Warner in a 50% cash and 50% stock transaction at approximately $107.50 USD for each share of Time Warner common stock, or $53.75 USD in cash a number of shares in AT&T common stock equal to the exchange ratio, for a consideration worth approximately $85.4 billion USD at announcement. West Merger Sub, Inc., a Delaware-incorporated wholly owned subsidiary of AT&T, would merge into Time Warner, and Time Warner continuing as the surviving entity. On February 15, 2017, Time Warner shareholders approved the merger. On November 20, 2017, the United States Department of Justice (DOJ) filed a complaint in the U.S. District Court, District of Columbia seeking a permanent injunction to prevent AT&T from acquiring Time Warner, alleging that the merger would substantially lessen competition in violation of federal antitrust law. On December 21, 2017, AT&T and Time Warner agreed to extend the termination date of the merger agreement to June 21, 2018 in light of the civil antitrust lawsuit. The court approved the acquisition. The acquisition was completed on June 14, 2018. TimeWarner was renamed Warner Media after the acquisition. In the second quarter of 2019, the borrower repaid $1.5 billion USD of the loan, representing the entirety of Tranche B and C. Then in the third quarter of 2019, the borrower repaid all of $750 million USD Tranche A, thereby extinguishing the entirety of the $2.25 billion USD loan.