Narrative
Full Description
Project narrative
On September 29, 2023, Transportadora Associada de Gás S.A. (TAG) signed a $2.055 billion syndicated loan agreement with a group of Chinese and non-Chinese banks to refinance a June 2019 loan that facilitated ENGIE Brasil Energia, ENGIE S.A., and CDPQ's acquisition of TAG from Petrobras. The loan carries an 8 year maturity and an interest rate of SOFR plus a 4.20% margin, a credit adjustment spread of 0.428%, and an additional unknown spread. Bank of China, BBVA, China Construction Bank, Citibank, Credit Agricole Group, ICBC, Intesa Sanpaolo, JP Morgan, Mizuho Bank, MUFG Bank, Santander, Société Générale, and Sumitomo Mitsui Banking Corporation all participated in the September 2023 syndicated loan. China Construction Bank contributed $98 million. The purpose of the loan was to refinance the $2.45 billion loan from June 2019 used by Engie and Canadian fund Caisse de Dépôt et Placement du Québec (CDPQ) to finance the acquisition of the 90% stake in TAG. Banco do Brasil, BNP Paribas, Bradesco, Credit Agricole Group, ING Bank, Itau BBA ,Mizuho Financial Group, MUFG Bank, Societe Generale, and Sumitomo Mitsui Banking Corporation contributed equally ($250 million) to the original loan. The original borrowing terms of the 2019 loan included an 8 year maturity and interest rate of 6-month LIBOR plus a 2.63% margin. There was an obligation under the June 2019 agreement to refinance by November 2026.
Staff comments
1. Crédit Agricole was the financial advisor for the refinancing and Lefosse was the legal advisor. 2. Engie and CDPQ bought a 90% equity stake in TAG from Petrobras in 2019 for $8.6 billion. They acquired the remaining 10% equity stake from Petrobras in 2020. See https://www.proximoinfra.com/news/59339/tag-refinances 3. ENGIE Brasil Energia, ENGIE S.A., and CDPQ formed a consortium to facilitate the acquisition in 2019. The shareholder composition of the consortium was: ENGIE Brasil Energia [32.5% equity stake], ENGIE S.A. (a [32.5% equity stake], and Caisse de dépôt et placement du Québec (CDPQ) [35% equity stake]. ENGIE Brasil Energia sold 15% of its stake in TAG to CDPQ in 2023 for BRL 3.1 billion, bringing the shares of TAG held by ENGIE and CDPQ to 50/50. 4. The total interest rate is 4.20% + Credit Adjustment Spread (0.428%) + spread. The remaining spread is unknown. For the time being, AidData has coded the interest rate as 4.628%. This issue warrants further investigation.