Narrative
Full Description
Project narrative
On June 30, 2010, China Construction Bank entered into a $28.3 million USD loan agreement with Hoku Corporation — a now-defunct Idaho-based clean energy company that specialized in polysilicon production for solar panels — to support the company's ongoing project-related financial needs. The proceeds were used by the borrower for general corporate purposes, particularly in connection with the continued development and construction of its polysilicon manufacturing facility in Pocatello, Idaho. The maturity of the loan is two years, and the interest rate is LIBOR plus 1.875%, with an option for the borrower — subject to lender approval — to pay interest at the highest published “Prime Rate” in the Wall Street Journal on loan tranches of at least $1 million USD. The loan was fully secured by a standby letter of credit drawn by Tianwei and issued by China Construction Bank’s Sichuan Branch in favor of its New York Branch. Hoku also entered into a reimbursement agreement with Tianwei, under which it agreed to cover all interest, fees, and expenses incurred in connection with the issuance and maintenance of the standby letter of credit. As of March 31, 2011, the entire $28.3 million USD was outstanding.
Staff comments
1. The entirety of the loan agreement is not available. However, Form 10-K from the company is available for descriptions of the loan. It can be accessed at https://getfilings.com/sec-filings/110715/HOKU-SCIENTIFIC-INC_10-K/. 2. Hoku Corporation was a U.S.-based clean energy company headquartered in Pocatello, Idaho. It began in fuel cell technology before transitioning to solar manufacturing. In 2009, it became majority-owned by China’s Tianwei New Energy Holdings. Hoku declared bankruptcy in 2013, and its assets were liquidated. 3. AidData estimates the interest rate by adding the margin (2%) to 6 months LIBOR.