ICBC contributes to a €9 billion EUR syndicated loan to Snam to support its spin-off from Eni (Linked to Record ID#108215)

Project narrative

On July 24, 2012, a syndicate of 19 banks — including the Bank of China (BOC) and the Industrial and Commercial Bank of China (ICBC) — entered into a €9 billion EUR (approximately $10.9 billion USD) syndicated loan agreement with Snam S.p.A. — an Italy-incorporated gas transportation company operating pipelines in Italy and internationally then majority-owned by Eni S.p.A. (52.53% stake), an Italian multinational energy company headquartered in Rome de facto controlled by the Italian Government via the Italian Ministry of the Economy and Finance (3.93% stake at time of loan) and Italian state-owned fund Cassa Depositi e Prestiti S.p.A. (CDP) (26.37% stake at time of loan); Snam S.p.A. also directly owned 5.39% of its own shares — to support its spin-off from Eni S.p.A. The loan was divided into four facilities: a €4 billion EUR bridge-to-bond facility with a maturity period of one year, a €2.5 billion EUR revolving credit facility (RCF) with a maturity period of three years, a €1.5 billion EUR revolving credit facility (RCF) with a maturity period of five years, and a €1.5 billion EUR term loan facility with a maturity period of five years. The loan carried a variable interest rate plus a margin. The loan was subject to a financial covenant require the borrower to adhere a contractually agreed net financial debt/RAB ratio and a negative pledge commitment under which the borrower and its subsidiaries could not create real guarantees or other liens on all or part of their respective assets, shares, goods and/or documents representing goods. Record ID#108215 captures BOC's contribution. Record ID#108241 captures ICBC's contribution. In addition to BOC and ICBC, the following lenders contributed to the loan syndicate: BNP Paribas S.A., Bank of America Merrill Lynch (BAML), Citibank, HSBC Bank PLC, Intesa Sanpaolo S.P.A., JPMorgan Chase Bank, N.A., Mediobanca - Banca di Credito Finanziario S.p.A., Société Générale S.A. (SocGen), UBS AG, UniCredit S.p.A., the Bank of Tokyo-Mitsubishi UFJ, Ltd. (BTMU), Barclays Bank Plc, Mizuho Bank, Ltd., Sumitomo Mitsui Banking Corporation (SMBC), Banca Popolare dell'Emilia Romagna S.C., and GE Capital Markets, Inc.. BNP Paribas, BAML, Citi, HSBC, Intesa Sanpaolo, JPMorgan, Mediobanca, Morgan Stanley, SocGen, UBS, and UniCredit served as bookrunners and mandated lead arrangers. BTMU, Barclays, Mizuho, and SMBC served as mandated lead arrangers. BOC, ICBC, Banca Popolare dell'Emilia Romagna, and GE Capital Markets also participated. The proceeds were to be used by the borrower to support its spin-off from its majority owner Eni, namely by refinancing some of the €11 billion EUR of debt that Snam had borrowed through Eni. In January 2012, Italian Prime Minister Mario Monti ordered Eni to sell its stake in Snam in order to increase competition in Italy’s gas transmission industry. At the end of May 2012, Eni agreed to sell a 30% minus one share interest for €3.5 billion EUR ($4.4 billion USD) to CDP, expected to be completed in mid-October 2012. In September and November 2012, Snam issued €4 billion EUR of bonds, which the borrower used to repay the €4 billion EUR bridge-to-bond facility. As of December 31, 2012, there were €2.2 billion EUR unused commitments under the facilities. In April 2013, Snam issued €1.5 billion EUR of bonds, which it used to repay the remainder of the €1.5 billion EUR term loan facility. In June 2013, a syndicate of lenders entered into a €3.5 billion EUR syndicated loan to Snam for refinancing purposes; this loan replaced (refinanced) the €4.5 billion EUR remaining commitments under the €9 billion EUR syndicated loan.