China Bank of Communications contributes $158.8 million USD to $794 million USD term loan in a syndicated debt package for the Big River Steel Plant Construction Project

Project narrative

On June 27, 2014, financial close was reached on deal in which a syndicate of five lenders — including the China Bank of Communications (BoCom or BoComm) — contributed to a $794 million USD term loan as a part of a syndicated debt financing package with Big River Steel, LLC — a special purpose vehicle (SPV) sponsored by Koch Minerals (40%), TPG Growth (20%), Arkansas Teachers Retirement System (20%), GCP Metals Investments (8%), Global Principal Partners GPP (6%), and International Steel Associates (6%) — for the Big River Steel Plant Construction Project. The full financing package included a $794 million USD term loan, a $30 million USD term loan (provided by Merced Capital), a $42 million USD term loan (provided by BRS Loan Investors LLC and Pinnacle Mountain Holding Company III LLC), and a $50 million term loan (from the State of Arkansas). Additionally, the State of Arkansas provided $96.5 million USD in grants. The sponsors provided a further $60 million USD in mezzanine debt and $460 million USD in equity investments. BoCom contributed to the $794 million USD term loan, which carried a maturity period of 10 years. KfW IPEX-Bank was the mandated lead arranger and underwriter of the $794 million USD term loan, which was syndicated among five total lenders after financial close. All lenders reportedly each contributed $158.8 million USD to the syndicate. In addition to KfW IPEX-Bank and BocCom, the following three other known lenders also reportedly contributed: BNP Paribas S.A., Société Générale S.A. (SocGen), and Landesbank Baden-Württemberg (LBBW). The proceeds of the loan would be used to construct the Big River Steel Plant along the Mississippi River in Osceola, Arkansas. The plant is considered a flex mill, which produces flat steel products from an electric arc furnace (EAF). At the time of its initial operations, Big River Steel was considered to be one of the greenest and most advanced steel mills in the United States. Construction on the plant broke ground on September 22, 2014, and was expected to be completed in March 2016 at the time. However, the operations began in phases; the batch anneal furnaces and skin pass mill were commissioned in March 2016 (the beginning of processing steel); the melt shop and hot mill became operation in December 2016; and full operations were announced on March 1, 2017. The SMS group was contracted to supply mechanical equipment, electrical systems, and automation systems. In the first construction stage, this included equipment such as a 150-t EAF, a 150-t twin-EAF, a 150-t RH circulation degasser, and gas clearing equipment. Then, the United States Steel Corporation purchased the plant in January 2021.