China Construction Bank contributes to a €7.175 billion EUR syndicated loan to Open Fiber for its FTTH Refinancing Project

Project narrative

On or around October 15, 2020, financial close was reached on a deal in which a syndicate of 21 banks — including the Bank of China (BOC) — entered into a €675.00 million EUR ($800.14 million USD) syndicated term loan agreement with Open Fiber S.p.A. — an Italy-incorporated wholesale-only operator on the Italian network infrastructures market then jointly owned by Enel S.p.A., an Italian multinational energy company distributing electricity and gas listed on the Borsa Italiana and minority-owned by Italy's Ministry of Economy and Finance (50.00% equity stake) and by CDP Equity S.p.A., an Italy-incorporated sovereign wealth fund wholly-owned by Italian majority state-owned Cassa Depositi e Prestiti S.p.A. (CDP) (50.00% equity stake) — for its Fiber-to-the-Home (FTTH) Project. The loan carried a maturity period of four years and eight months (4.667 years) and a final maturity date of August 3, 2025. The loan was an up-sizing / increase of an existing €3.5 billion EUR facility from 2018, increasing to €4.145 billion EUR. Financial close was achieved on November 24, 2020. All 21 lenders, including BOC, contributed approximately €32,142,857.1429 EUR ($38.10 million USD) to the loan syndicate. Record ID#109552 captures BOC's contribution. The proceeds were to be used by the borrower to fund the development of a national fiber-optic ultra-broadband network of the FTTH type, covering 18.8 million households across 271 cities and 7,000 municipalities in Italy. The project was worth €7 billion EUR, with €3 million EUR of investments implemented as of October 2020. On or around December 14, 2021, a syndicate of lenders entered into a €7.175 billion EUR ($8.14022 billion USD) syndicated loan agreement with Open Fiber — now held by CDP Equity (60.00% equity stake) and Macquarie European Infrastructure Fund 6 S.C.S.p. (MEIF6), a Luxembourg-incorporated investment fund managed by its England and Wales-incorporated liquidating trustee Macquarie Infrastructure and Real Assets (Europe) Limited (MIRAEL)), wholly-owned by England and Wales-incorporated Macquarie Asset Management UK Holdings No.1 Limited (MAMUKH1), which is wholly0owned by Australia-incorporated Macquarie Asset Management UK Holdings Pty. Ltd. (MAMUKH), a directly wholly-owned subsidiary of Australia-incorporated Macquarie Asset Management Holdings Pty. Ltd., wholly-owned by Australia-incorporated and based Australia's Macquarie Group Limited (40.00% equity stake) — for its FTTH Refinancing Project. This loan was divided into five tranches: a €5.000 billion EUR ($5.67263 billion USD) term loan, a €500.00 million EUR ($567.26 million USD) revolving credit facility (RCF), a €450.00 million EUR ($510.54 million USD) guarantee facility, a €1.075 billion EUR ($1.21961 billion USD) incremental term loan facility, and a €150.00 million EUR ($170.18 million USD) incremental guarantee facility. The loan carried a maturity period of seven years and a final maturity date of February 14, 2029. Then, in June 2022, syndication closed with a total syndicate of 29 banks — including BOC, the Bank of Communications Co., Ltd. (BoComm), China Construction Bank Corporation (CCB), and the Industrial and Commercial Bank of China (ICBC) — now contributing to the €7.175 billion EUR syndicated loan. Record ID#109569 captures BOC's contribution. Record ID#109570 captures BoComm's contribution. Record ID#109571 captures CCB's contribution. Record ID#109572 captures ICBC's contribution. In addition to BOC, BoComm, CCB, and ICBC the following lenders contributed to the loan syndicate: Crédit Agricole S.A. (Crédit Agricole Group), Banco BPM S.p.A., Banco Santander, S.A., BNP Paribas S.A., ING Bank N.V., Intesa Sanpaolo S.p.A., Société Générale S.A. (SocGen), UniCredit S.p.A., Banco Bilbao Vizcaya Argentaria, S.A. (BBVA), Generali Global Infrastructure, Sumitomo Mitsui Banking Corporation (SMBC), BPER Banca S.p.A., MPS Capital Services Banca per le Imprese S.p.A., Bayerische Landesbank (BayernLB), KfW IPEX-Bank GmbH, MUFG Bank, Ltd., Mizuho Bank, Norddeutsche Landesbank Girozentrale (NORD/LB), Allied Irish Banks plc (AIB), Cassa di Risparmio di Bolzano S.p.A., Banca Popolare di Puglia e Basilicata S.C.p.A. (BPPB), La Banque Postale, NIBC Bank N.V., Shinhan Bank, and CDP. Banco BPM, BNP Paribas, Crédit Agricole, ING, Intesa Sanpaolo, Santander, SocGen, and UniCredit served as mandated lead arrangers, underwriters, and bookrunners. UniCredit served as agent, account, and guarantee issuing bank. The proceeds were to be used by the borrower to refinance its existing €4.145 billion EUR syndicated loan (originating in 2016 and including the 2020 up-sizing) and to up-size it to support further fiber investments as part of the new business plan for the FTTH Project, which focused on the wholesale-only model available to all operators and built on environmental, economic, and social sustainability. The FTTH Project now with €11 billion EUR in investments between 2022 and 2031 expected and to connect to 24 million households from over next six years. As of June 2022, €4 billion EUR had been invested to date, and had received public grants of €3.7 billion EUR from Italy's National Recovery and Resilience Plan (NRRP). The loan was the largest project financing operation ever carried out on infrastructure networks in the Europe, the Middle East and Africa (EMEA) region and largest financing transaction for telecommunications network investments ever completed in EMEA.