Bank of China contributes £33.79 million GBP to the £734.65 million GBP revolver tranche of a £3.38575 billion GBP syndicated loan to facilitate the acquisition of a 60% stake in National Grid Gas by a consortium led by Macquarie and British Columbia Investment Management Corp.

Project narrative

On January 31, 2023, financial close was reached on a deal in which a syndicate of 16 lenders — including the Bank of China (BOC) and China Construction Bank Corporation (CCB) — entered into a £3.38575 billion GBP ($4.1788 billion USD) syndicated loan agreement with GasT MidCo Limited — an England and Wales-incorporated special purpose vehicle (SPV) wholly-owned by GasT PledgeCo Limited, an England and Wales-incorporated holding company and joint venture between Luppiter Bidco Limited, an England and Wales-incorporated SPV wholly-owned by Luppiter Consortium Limited, an England and Wales-incorporated joint venture between BCI UK Irr Limited, an England and Wales-incorporated vehicle wholly owned by Canada-incorporated Varese IRR LP, a partnership held by Bolsena Fund, a Canada-incorporated closed fund managed by Canadian Crown company British Columbia Investment Management Corporation (BCI) (27.71% stake in Luppiter Consortium), Luppiter Ventures 1 S.à r.l., a Luxembourg-incorporated company wholly-owned by MGIF Luppiter Holdings S.à r.l., a Luxembourg-incorporated indirect subsidiary of Macquarie Asset Management (MAM), the asset management division of Macquarie Group Limited (41.63% stake in Luppiter Consortium), Luppiter Ventures 2 S.à r.l., a Luxembourg-incorporated wholly-owned by MSCIF Luppiter Investments S.à r.l., a Luxembourg-incorporated indirect subsidiary of Macquarie Asset Management (MAM) (30.66% stake in Luppiter Consortium) (60% equity stake); and by Lattice Group Limited, an England and Wales-incorporated wholly-owned subsidiary of National Grid Holdings One plc, an England and Wales-incorporated wholly-owned subsidiary of National Grid Luxembourg SARL, a Luxembourg-incorporated wholly-owned subsidiary of National Grid plc, a British multinational electricity and gas utility company headquartered in London, England and listed on the London Stock Exchange (40% equity stake) — to facilitate the acquisition of a 60% stake in National Grid Gas by a consortium led by Macquarie and British Columbia Investment Management Corp.. The loan was divided into six tranches: a £211.48 million GBP ($261.02 million USD) term loan tranche with an interest rate based on SONIA plus an initial margin of 500 basis points (bps), increasing to 600 bps after one year, and then 700 bps after another year; a £506.97 million GBP ($625.72 million USD) term loan tranche with an interest rate based on SONIA plus an initial margin of 500 bps, increasing to 600 bps after one year, and then 700 bps after another year; a £734.65 million GBP ($906.73 million USD) revolver tranche with an interest rate based on SONIA plus a margin of 700 bps; a £1.26488 billion GBP ($1.56116 billion USD) term loan tranche with an interest rate based on SONIA plus an initial margin of 1,250 bps for two years, rising to 1,450 bps, and then rising again to 1,650 bps after one year; a £499.97 million GBP ($617.08 million USD) term loan tranche with an interest rate based on SONIA plus an initial margin of 1,250 bps for two years, rising to 1,450 bps, and then rising again to 1,650 bps after one year; and a £167.80 million GBP ($207.10 million USD) liquidity facility tranche with an interest rate based on SONIA plus a margin of 950 bps. The loan carried a maturity period of five years. The loan was secured by (i.e. collateralized against) a first legal mortgage on the property of the chargors; a first fixed charge on all the rights, title, and interest to all real property and all related rights of the chargors; a first fixed charge on all rights, title, and interest in tangible moveable property and all related rights of the chargors; a first fixed charge on all rights, title, and interests to certain accounts and all related rights of the chargors; a first fixed charge of all rights, title, and interest in any contract or agreement to which the chargor was a party to and related rights; a first fixed charge on all rights, title, and interest in and to its monetary claims (book and other debts and claims) and all related rights of the chargors; a first fixed charge on all rights, title, and interest in and to its investments and all dividends, interest, and other monies payable in respect of the investments and all related rights of the chargors; a first fixed charge of all the rights, title, and interest in and to the shares and all dividends, interest, and other monies payable in respect of those shares of the chargors, namely 50,000 ordinary shares with an issued capital share of £1 GBP in GasT Midco Limited held by GasT Topco Limited; a first fixed charge of all the rights, title, and interest in and to its intellectual property and all related rights of the chargors; a first fixed charge of all the rights, title, and interest in and to all the goodwill of the chargors and related rights of the chargors; a first fixed charge of all the rights, title, and interest to all uncalled capital of the chargor and all related rights of the chargors; a first fixed charge on all the rights, title, and interest in and to each specific contract and insurance policy of each chargor and all related rights; an assignment of all the rights, claims, title, and interest in and to each specific contract of that chargor and all related rights; an assignment of all the rights, claims, title, and interest in and to each insurance policy of that chargor; and first floating charge on all present and future assets and undertaking of each chargor as charged by GasT MidcoLimited and GasT Midco Limited in a security agreement dated January 25, 2023 with RBC Europe Limited as security trustee. BOC contributed £14.29 million GBP ($17.64 million USD) and CCB contributed £14.86 million GBP ($18.34 million USD) to the £211.48 million GBP term loan tranche. Record ID#109438 captures BOC's contribution. Record ID#109451 captures CCB's contribution. In addition to BOC and CCB, the following 14 lenders contributed to the tranche: ABN AMRO Bank N.V. (£10.68 million GBP; $13.18 million USD), Bank of America (£10.27 million GBP; $12.67 million USD), BNP Paribas S.A. (£14.29 million GBP), Canadian Imperial Bank of Commerce (CIBC) (£10.27 million GBP), Crédit Agricole Group (£14.29 million GBP), Intesa Sanpaolo S.P.A. (£13.60 million GBP; $16.79 million USD), Lloyds Bank (£15.46 million GBP; $19.08 million USD), Mizuho Bank, Ltd. (£10.27 million GBP), MUFG Bank, Ltd. (£14.86 million GBP), National Westminster Bank Plc (NatWest) (£14.86 million GBP), Royal Bank of Canada (RBC) (£14.86 million GBP), Bank of Nova Scotia (Scotiabank) (£9.77 million GBP; $12.06 million USD), Sumitomo Mitsui Banking Corporation (SMBC) (£15.25 million GBP; $18.82 million USD), and Toronto-Dominion Bank (TD Bank) (£13.60 million GBP). BOC contributed £34.27 million GBP ($42.30 million USD) and CCB contributed £35.62 million GBP ($43.96 million USD) to the £506.97 million GBP term loan tranche. Record ID#109452 captures BOC's contribution. Record ID#109457 captures CCB's contribution. In addition to BOC and CCB, the following 14 lenders contributed to the tranche: ABN AMRO Bank (£25.60 million GBP; $31.60 million USD), Bank of America (£24.61 million GBP; $30.37 million USD), BNP Paribas (£34.27 million GBP), CIBC (£24.61 million GBP; $30.37 million USD), Crédit Agricole (£34.27 million GBP), Intesa Sanpaolo (£32.62 million GBP; $40.26 million USD), Lloyds Bank (£37.06 million GBP; $45.74 million USD), Mizuho Bank (£24.61 million GBP), MUFG Bank (£35.62 million GBP), NatWest (£35.62 million GBP), RBC (£35.62 million GBP), Scotiabank (£23.39 million GBP; $28.87 million USD), SMBC (£36.56 million GBP; $45.12 million USD), and TD Bank (£32.62 million GBP). BOC contributed £33.79 million GBP ($41.70 million USD) and CCB contributed £35.13 million GBP ($43.36 million USD) to the £734.65 million GBP revolver tranche. Record ID#109453 captures BOC's contribution. Record ID#109458 captures CCB's contribution. In addition to BOC and CCB, the following 14 lenders contributed to the tranche: ABN AMRO Bank (£60.25 million GBP; $74.36 million USD), Bank of America (£59.27 million GBP; $73.15 million USD), BNP Paribas (£68.80 million GBP; $84.92 million USD), CIBC (£24.27 million GBP; $29.95 million USD), Crédit Agricole (£33.80 million GBP; $41.72 million USD), Intesa Sanpaolo (£32.17 million GBP; $39.71 million USD), Lloyds Bank (£81.22 million GBP; $100.24 million USD), Mizuho Bank (£59.27 million GBP), MUFG Bank (£35.13 million GBP), NatWest (£60.13 million GBP; $74.21 million USD), RBC (£35.13 million GBP), Scotiabank (£23.07 million GBP; $28.47 million USD), SMBC (£36.05 million GBP; $44.49 million USD), and TD Bank (£57.17 million GBP; $70.56 million USD). BOC contributed £81.74 million GBP ($100.89 million USD) and CCB contributed £91.96 million GBP ($113.50 million USD) to the £1.26488 billion GBP term loan tranche. Record ID#109454 captures BOC's contribution. Record ID#109459 captures CCB's contribution. In addition to BOC and CCB, the following 14 lenders contributed to the tranche: ABN AMRO Bank (£61.06 million GBP; $75.36 million USD), Bank of America (£58.70 million GBP; $72.45 million USD), BNP Paribas (£81.74 million GBP), CIBC (£58.70 million GBP; $72.45 million USD), Crédit Agricole (£81.74 million GBP), Intesa Sanpaolo (£84.20 million GBP; $103.92 million USD), Lloyds Bank (£95.66 million GBP; $118.07 million USD), Mizuho Bank (£58.70 million GBP), MUFG Bank (£91.96 million GBP), NatWest (£91.96 million GBP), RBC (£91.96 million GBP), Scotiabank (£60.38 million GBP; $74.52 million USD), SMBC (£90.22 million GBP; $111.35 million USD), and TD Bank (£84.20 million GBP). BOC contributed £32.31 million GBP ($39.88 million USD) and CCB contributed £36.35 million GBP ($44.86 million USD) to the £499.97 million GBP term loan tranche. Record ID#109455 captures BOC's contribution. Record ID#109460 captures CCB's contribution. In addition to BOC and CCB, the following 14 lenders contributed to the tranche: ABN AMRO Bank (£24.14 million GBP; $29.79 million USD), Bank of America (£23.20 million GBP; $28.63 million USD), BNP Paribas (£32.31 million GBP), CIBC (£23.20 million GBP), Crédit Agricole (£32.31 million GBP), Intesa Sanpaolo (£33.28 million GBP; $41.08 million USD), Lloyds Bank (£37.81 million GBP; $46.67 million USD), Mizuho Bank (£23.20 million GBP), MUFG Bank (£36.35 million GBP), NatWest (£36.35 million GBP), RBC (£36.35 million GBP), Scotiabank (£23.87 million GBP; $29.46 million USD), SMBC (£35.66 million GBP; $44.01 million USD), and TD Bank (£33.28 million GBP). BOC contributed £12.42 million GBP ($15.33 million USD) and CCB contributed £14.00 million GBP ($17.28 million USD) to the £167.80 million GBP liquidity facility tranche. Record ID#109456 captures BOC's contribution. Record ID#109461 captures CCB's contribution. In addition to BOC and CCB, the following 12 lenders contributed to the tranche: Bank of America (£8.92 million GBP; $11.01 million USD), BNP Paribas (£12.42 million GBP), CIBC (£8.92 million GBP), Crédit Agricole (£12.42 million GBP), Intesa Sanpaolo (£9.32 million GBP; $11.50 million USD), Mizuho Bank (£8.92 million GBP), MUFG Bank (£20.18 million GBP; $24.91 million USD), NatWest (£14.42 million GBP; $17.80 million USD), RBC (£14.42 million GBP), Scotiabank (£9.47 million GBP; $11.69 million USD), SMBC (£8.77 million GBP; $10.82 million USD), TD Bank (£13.20 million GBP; $16.29 million USD). The proceeds were to be used to facilitate the acquisition of National Grid Gas by GasT MidCo Limited, a holding company with a 60% stake held by consortium led by Macquarie and British Columbia Investment Management Corp., giving it the equivalent control in National Grid Gas, from its previous 100% ownership by National Grid plc. In addition to the debt, the sponsors provided £814.25 million GBP ($1.00497 billion USD) in equity for the £4.200 billion GBP ($5.18378 billion USD) acquisition. In addition to Macquarie and BCI, Pantheon Infrastructure made a £40 million GBP equity commitment for the acquisition of the 60% stake. National Grid Gas serves as the regulated natural gas transmission operator (monopoly) of the United Kingdom, as the sole owner and system operator of the high-pressure gas National Transmission System (NTS), a system covering 7,660 kilometers in England, Wales, and Scotland that transits gas for home heating and the power industry and connects eight distribution networks and other independent systems. It also has an independent gas meter business, the largest owner of traditional gas meters in the United Kingdom with approximately 8.4 million domestic and commercial meters; it maintains seven million gas assets (domestic, industrial, and commercial) across the United Kingdom and besides meter installation and maintenance conducts asset procurement, logistics management, exchange and removal, and customer service operations. In April 2021, National Grid began the sale process of National Grid Gas. In late December 2021 and early January 2022, the first round of bidding for National Grid Gas began. Rumored bidders included CKI and Equitix. Then, in March 2022, the Macquarie Asset Management-led consortium signed an agreement to acquire a 60% stake in National Grid Gas, including an option to acquire the other 40% stake from National Grid. The acquisition was expected to be completed in the second half of 2022, subject to competition and regulatory approvals. The acquisition was completed on January 31, 2023. In February 2023, the business was rebranded and renamed to National Gas Transmission plc. In July 2023, the consortium exercised an option to begin acquiring the further 20% stake for £700 million GBP ($915 million USD). In March 2024, the consortium acquired the further 20% stake. In July 2024, Macquarie Asset Management exercised its option to acquire the remaining 20% stake in National Grid, to be completed before the first quarter of 2025. It was completed in September 2024 and as a result, the indirect stakes in National Gas Transmission were as followings: Macquarie Asset Management (60.09% stake), British Columbia Investment Management (27.71% stake), and Australian Retirement Trust (12.20% stake).