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Overview

Bank of China (Hong Kong) contributes to a $300 million syndicated loan to refinance a bridge loan used to purchase of a stake in two Russian oilfields

Commitments (Constant USD, 2023)$159,618,957
Commitment Year•2017Country of Activity•RussiaDirect Recipient Country of Incorporation•IndiaOverseas Jurisdiction•Hong Kong (China)Sector•Industry, Mining, ConstructionFlow Type•Loan

Status

Project lifecycle

Completion

Pipeline: PledgePipeline: CommitmentImplementationCompletion

Timeline

Key dates

Commitment date
Jun 1, 2017
Start (actual)
Sep 28, 2016
End (actual)
Sep 28, 2016
Last repayment (originally scheduled)
May 31, 2022

Stakeholders

Organizations involved in projects and activities supported by financial and in-kind transfers from Chinese government and state-owned entities

Funding agencies

State-owned Commercial Banks

  • Bank of China (Hong Kong) Limited (BOCHK)

Cofinancing agencies

Private Sector

  • Sumitomo Mitsui Banking Corporation (SMBC)

Receiving agencies

State-owned companies

  • Indian Oil Corporation Limited (IOC)

Loan description

In 2016, Bank of China (Hong Kong) contributes to a USD 300 million syndicated loan to refinance a bridge loan used to purchase of a stake in two Russian oilfields

Interest type•Variable Interest RateMaturity•5 years

Narrative

Full Description

Project narrative

In June 2017, financial close was reached on a deal in which a two-bank syndicate—Sumitomo Mitsui Banking Corporation (SMBC) as sole mandated lead arranger and bookrunner and Bank of China (Hong Kong) Limited (BOCHK) joining in syndication—entered into a $300 million USD syndicated bridge takeout loan agreement with Indian Oil Corporation (an Indian majority state-owned oil and gas company) to finance the purchase of a stake in two Russian oilfields which it acquired in 2016 via the refinancing of a bridge loan used to finance the acquisition. The loan carried a maturity period of five years, a bullet repayment profile, and an interest rate based on a variable rate plus a margin of 68 basis points (bps) and paid the lenders a top-level all-in of 95 bps over the variable rate. On March 16, 2016, India's public sector oil companies led by Oil and Natural Gas Corporation's (ONGC) foreign arm ONGC Videsh Limited (OVL) and including Indian Oil, Oil India Limited, and Bharat Petroresources entered into agreements to purchase stakes in two lucrative Russian oilfields in Siberia for an estimated $4.2 billion USD from Russian national oil company Rosneft, with OVL taking a 26% stake in the Vankor oilfield in Siberia with recoverable reserves of 2.5 billion barrels, while Indian Oil, Oil India, and Bharat Petroresources would take 23.9% between them in Vankor, while Indian Oil, Oil India, and Bharat Petroresources would collectively acquire a 29,9% stake in the Tass-Yuriakh oilfield in Siberia, which recoverable reserves of 137 million ton and produces 20,000 barrels per day, from Rosneft for $1.28 billion USD. Rosneft was reportedly selling the stakes in the promising assets to help pay out debt from its 2013 $55 billion USD acquisition of TNK-Bp. India's Cabinet Committee on Economic Affairs approved the acquisitions of the 23.9% stake in JSC Vankorneft and the 29.9% stake in LLC Taa-Yuryakh on September 28, 2016, and the acquisitions were completed shortly thereafter.

Staff comments

1. The individual contributions of the two lenders to this $300 million syndicated loan are unknown. For the time being, AidData has estimated BOCHK's contribution by assuming that each contributed equally ($150,000,000 USD) to the loan syndicate.