Narrative
Full Description
Project narrative
In June 2021, a syndicate of six banks — including the Bank of China (BOC) — entered into a £850 million GBP syndicated senior loan facilities agreement with NATS (En Route) plc (NERL) — an England and Wales-incorporated company that was the sole provider of the United Kingdom’s en route air traffic control services, wholly-owned by NATS Limited, an England and Wales-incorporated company wholly-owned by NATS Holdings Limited, an England and Wales-incorporated air traffic company headquartered Whiteley, England that operates as a public-private partnership, with the following shareholders: The Airline Group Limited, an England and Wales-incorporated joint venture (41.9% equity stake), LHR Airports Limited, an England and Wales-incorporated wholly-owned subsidiary of Heathrow Airport Holdings Limited, an England and Wales-incorporated holding company that owns and operates Heathrow Airport in Hillingdon, London, England (4.2% equity stake), NATS Employee Share Trust Limited, an England and Wales-incorporated company that manages the all-employee share ownership plan for NATS employees (NATS Employee Share Trust was wholly-owned by NATS Limited) (5.0% equity stake), and the Government of the United Kingdom, which also had a golden share (48.9% equity stake) — for refinancing purposes. The bank facilities consisted of two tranches: a £400 million GBP sustainability-linked revolving facility with a maturity period of three years and a final maturity date in May 2023 with two one-year extension options that would extend it out to May 2026; and a £450 million GBP COVID bridge facility with a maturity period of two years and a final maturity date in May 2023. The loan carried an interest rate based on SONIA plus a margin of 0.45%. The sustainability-linked facility featured environmental Key Performance Indicators (KPIs) related to Scope 1 and Scope 2 emissions, selected Scope 3 emissions, and the NATS Holdings' carbon disclosure project score. The facilities were unsecured and included a financial covenant for a net debt/regulatory asset base (RAB) ratio at 85% to be checked by a single point in time. Record ID#109480 captures BOC's contribution. In addition to BOC, the following lenders contributed to the loan syndicate: Barclays Bank PLC, BNP Paribas S.A., National Westminster Bank Plc (NatWest), MUFG Bank, Ltd., and Lloyds Bank plc. Barclays served as arranger, facility agent and hedge coordinator. BNP Paribas served as arranger, documentation agent, and sustainability coordinator. NatWest, MUFG, Lloyds, and BOC served as arrangers. The proceeds were used by the borrower to fully refinance its existing secured bank facilities, including the undrawn portion of £385 million GBP, which were prepaid and cancelled: a £350 million GBP senior secured revolving term loan facility, a £50 million GBP senior secured revolving credit facility, and a £380 million GBP senior secured liquidity facility. On the same day as signing, the borrower drew down £40 million GBP under the £850 million GBP loan. In March 2022, the lending syndicate entered into an amendment agreement with the borrower for the £850 million GBP loan; in the amendment, the maturity of each facility was increased by one year — the £400 million GBP revolving facility with its maturity period extended to May 2024 and the £450 million GBP bridge facility with its maturity period extended to May 2025. Record ID#109485 captures BOC's contribution to the debt rescheduling. In March 2023, NERL issued £145 million GBP of fixed rate bonds and then cancelled the £450 million GBP bridge facility. As of March 31, 2023, £65 million GBP was drawn under the £400 million GBO revolving facility agreement. On April 27, 2023, the lending syndicate entered into an amendment agreement with the borrower for the £4000 million GBP loan; in the amendment, the maturity of was increased by one year — for a new maturity of five years — to mature in May 2026, in line with the second amendment option. Record ID#109486 captures BOC's contribution to the debt rescheduling.
Staff comments
1. The individual contributions of the six lenders to this £850 million GBP syndicated loan are unknown. AidData has assumed each lender contributed to each tranche. Therefore, to estimate BOC's contribution, AidData has assumed that each contributed equally (£141,666,666.667 GBP) to the loan syndicate. 2. It is unclear whether BOC contributed to each tranche. For the time being, AidData has assumed it had, but taken the average of the maturity periods of the tranches {[(3 + 2) / 2] = 2.5 years) coded it as the maturity period of this record. 3. NATS (En Route) plc (NERL) was the core of NATS Holdings’ operations, account for over 75% of NATS Holdings' revenue. NATS (En Route) was the sole provider of air traffic control services for aircraft flying en route in United Kingdom airspace and the eastern part of the North Atlantic. It provided approach services to aircraft arriving at or departing from the major airports around London and air traffic control services to helicopters operating in the North Sea. It also had a long-term agreement to provide the British military with engineering, surveillance and communications services. 4. The ultimate parent entity of Heathrow Airport Holdings Limited is FGP Topco Limited. The shareholders of FGP Topco Limited were Hubco Netherlands B.V. (25.00%) (indirect subsidiary of Ferrovial, S.A., Spain), Qatar Holding Aviation (20.00%) (a wholly owned subsidiary of Qatar Holding LLC, which is wholly owned by Qatar sovereign wealth fund's Qatar Investment Authority (QIA)), Caisse de dépôt et placement du Québec (12.62%), Baker Street Investment Pte Ltd (11.20%) (an investment vehicle of the Government of Singapore Investment Corporation), QS Airports UK, LP (11.18%) (investment vehicles managed by Alinda Capital Partners), Stable Investment Corporation (10.00%) (an investment vehicle of Chinese sovereign wealth fund, China Investment Corporation (CIC)) and USS Buzzard Limited (10.00%) (wholly-owned by the Universities Superannuation Scheme). 5. AidData estimates the interest by taking the 6-month average SONIA at the time of commitment (0.0498%) plus the applicable margin of 0.45% equal to 0.4998%