Bank of China contributes £3.47 million GBP to the £104 million GBP debt service reserve facility of a £2.1 billion GBP syndicated loan to finance Juno BidCo's acquisition of a 50% stake in the 1320 MW Hornsea 2 Offshore Wind Farm

Project narrative

On September 29, 2022, a syndicate of 30 banks — including the Bank of China (BOC) — entered into a £2.100 billion GBP ($2.33229 billion USD) syndicated senior loan agreement with Juno BidCo Limited — an England and Wales-incorporated special purpose vehicle (SPV) and wholly-owned subsidiary of Juno Topco Limited, an England and Wales-incorporated joint venture of AXA PIE Lux 3 S.a.r.l., a Luxembourg-incorporated subsidiary of AXA IM Alts, the real assets, structure finance, and chorus investment business unit of Axa Investment Managers (Axa IM), the investment arm of Axa, S.A. (50% equity stake) and Vaugirard Grimsby SAS, a France-incorporated subsidiary of Crédit Agricole Assurances S.A., a France-incorporated subsidiary of Crédit Agricole S.A. (50% equity stake) — to finance its acquisition of a 50% stake in the 1320 MW Hornsea 2 Offshore Wind Farm. The loan was divided into seven tranches: a £1.183 billion GBP ($1.31386 billion USD) green loan tranche with a maturity period of 16 years and nine months (16.75 years), a final maturity date of June 30, 2039, a grace period of six months (0.5 years) and a first repayment date of March 31, 2023; a £200.00 million GBP ($222.12 million USD) green loan tranche with a maturity period of 16.75 years, a final maturity date of June 30, 2039, a grace period of 0.5 years, and a first repayment date of March 31, 2023; a £374.00 million GBP ($415.37 million USD) green loan tranche with a maturity period of five years and a final maturity date of September 29, 2027; a £173.00 million GBP ($192.14 million USD) revolving credit facility (RCF) tranche with a maturity period of three years and a final maturity date of March 29, 2025; a £104.00 million GBP ($115.50 million USD) debt service reserve facility with a maturity period of 16.75 years and a final maturity date of June 30, 2039; a £40.00 million GBP ($44.42 million USD) letter of credit tranche with a maturity period of 16.75 years, a final maturity date of June 30, 2039, a grace period of 0.5 years, and a first repayment date of March 31, 2023; and a £26.00 million GBP ($28,88 million USD) letter of credit tranche with a maturity period of 16.75 years, a final maturity date of June 30, 2039, a grace period of 0.5 years, and a first repayment date of March 31, 2023. The loan carried a variable interest rate based on a floating rate plus a margin of around 150 basis points (bps). The loan included a financial covenant tested quarterly with effect from first scheduled repayment date on March 31, 2023 measuring the borrower's historic Debt-Service Coverage Ratio (DSCR); the ratio should be no less than 1.05:1 for default and 1.10:1 for lock up. One of the tranches was an export credit agency (ECA) tranche with a guarantee from Denmark's EKF. This loan was secured by (i.e. collateralized against) a first legal mortgage on all shares in Hornsea Two Holdings Limited owned by June BidCo Limited; a first fixed charge on all of its rights, title, interest, and benefit in, to, and under all other shares, stocks, debentures, bonds, or securities and investments owned by it or held on its behalf; a first fixed charge on all its rights, title, interest, and benefit in the respect of any amount standing to the credit of any account it has, including all rights to receive the payments of any amounts which may become payable to the chargor, and all payments received by it; a first fixed charge on all its rights, title, interest, and benefit in all of its book and other debt debts, all other moneys due and owing to it, and the benefit of all rights, securities, or guarantees of any nature held by it; a first fixed charge on all of its rights, title, interest, and benefit in any agreement, instrument, or other document to which it was a party, including any relevant contracts, namely each hedging documents, the acquisition documents, the I-PPA, the I-PPA direct agreement, each offtaker credit support document, the lifting agreement, any acceptable shareholder collateral, the construction costs side letter, the shareholders' agreement, each shareholder facility agreement, each shareholder loan, each junior document, the account bank agreement, and any investor documents; a first fixed charge on all of its rights, title, interest, and benefit under and in the respect of the insurances, including its rights, benefits, and interest in the insurance proceeds; a first fixed charge on any beneficial interest, claim, or entitlement it has in any pension fund, its goodwill, the benefit of any authorization, the right to recover and receive compensation which may be payable to it, its uncalled capital, and the benefit of all rights in relation thereto; a first floating charge on all its assets, property, revenues, and rights whatsoever and wheresoever situated or any part of them and all rights, title, and interests in the foregoing as charged by June BidCo Limited in a borrower debenture dated September 29, 2022. The loan was also secured by a first legal mortgage on all its right, title, interest, and benefit in the 100 ordinary shares in Juno BidCo Limited owned by June Topco Limited; a first fixed charge of all its rights, title, and interest under the respect of any shareholder loan; and a first floating charge on all its assets, property, revenues, rights, title, and interests as charged by June Topco Limited in a borrower shareholder debenture dated September 29, 2022. MUFG Bank served as security trustee. All lenders contributed approximately £39,433,333.3333 GBP ($43.80 million USD) to the £1.183 billion GBP tranche. Record ID#109335 captures BOC's contribution. All lenders contributed approximately £6,666,666.66667 GBP ($7.40 million USD) to the £200 million GBP tranche. Record ID#109341 captures BOC's contribution. All lenders contributed approximately £12,466,666.6667 GBP ($13.85 million USD) to the £374 million GBP tranche. Record ID#109342 captures BOC's contribution. All lenders contributed approximately £5,766,666.66667 GBP ($6.40 million USD) to the £173 million GBP tranche. Record ID#109343 captures BOC's contribution. All lenders contributed approximately £3,466,666.66667 GBP ($3.85 million USD) to the £104 million GBP tranche. Record ID#109344 captures BOC's contribution. All lenders contributed to the £1.33 million GBP ($1.48 million USD) to the £40 million GBP letter of credit tranche and £0.87 million GBP ($0.96 million USD) to the £26 million GBP letter of credit tranche. AidData does not consider letters of credit to be flows. In addition to BOC, the following lenders contributed to the loan syndicate: Allied Irish Banks, plc (AIB), ASR Levensverzekering N.V., Bank of America, Barclays Bank Plc, BNP Paribas S.A., BNP Paribas Fortis S.A./N.V., Canadian Imperial Bank of Commerce (CIBC), Crédit Industriel et Commercial (CIC), DZ Bank AG, Landesbank Hessen-Thüringen (Helaba), HSBC Bank PLC, ING Bank N.V., Landesbank Baden-Württemberg (LBBW), Korea Development Bank (KDB), Lloyds Bank plc, Mitsubishi UFJ Trust and Banking Corporation, MUFG Bank, Ltd., Mizuho Bank, Ltd., Natixis, National Westminster Bank Plc (NatWest), Norinchukin Bank (Nochu Bank), Oversea-Chinese Banking Corporation, Limited (OCBC Bank), Skandinaviska Enskilda Banken AB (SEB), Siemens Bank GmbH, Société Générale S.A. (SocGen), Standard Chartered Bank plc, Sumitomo Mitsui Banking Corporation (SMBC), Sumitomo Mitsui Trust Bank, Limited (SMTB), and UniCredit S.p.A.. The proceeds were used by the borrower to acquire a 50% equity stake in Hornsea Two Holdings Limited, an intermediate company holding 100% of the share capital of Breesea Limited, Sonningmay Wind Limited and Soundmark Wind Limited, three project companies that operate the Hornsea 2 Offshore Wind Farm, a fixed offshore wind farm with a capacity of 1320 MW consisting of 165 x 8 MW Siemens Gamesa wind turbines on a 462 square kilometer (178 square mile) plot located 89 kilometers off the Yorkshire Coast of England and a P&M base at the Port of Grimsby. The wind farm became fully operational in August 2022. It had capacity to power the equivalent of over 1.3 million homes annually. In July 2021, Ørsted has put a 50% stake in the Hornsea 2 offshore wind farm up for sale. First round bids were due later in 2021. In March 2022, Ørsted signed an agreement to sell a 50% ownership stake in the under construction Hornsea 2 to AXA IM Alts and Crédit Agricole Assurances (25% each) for £3 billion GBP ($3.93 million USD), with an expected close in the second half of 2022 once the wind farm was fully commissioned. Orsted would retain 50% and was to run the 20-year operations and maintenance from its P&M base at the Port of Grimsby. Hornsea 2 was, at the time, the largest offshore wind farm in the world. This was the largest single project mergers & acquisition deal in the offshore wind sector to date. The acquisition was completed on September 29, 2022.