Bank of China (Frankfurt Branch) contributes to a €440 million EUR syndicated term loan to facilitate Huazhu Group's acquisition of Deutsche Hospitality

Project narrative

In January 2020, a three-bank syndicate signed a €440,000,000 EUR syndicated term facility agreement with China Lodging Holdings (HK) Limited — a Hong Kong-incorporated wholly owned subsidiary of Huazhu Group Limited, a Chinese hotel operator and franchisor formerly known as China Lodging Group that operated over 5,100 hotels as of September 2019 — to support Huazhu's acquisition of all the shares of Frankfurt-based German hotel company Steigenberger Hotels Aktiengesellschaf (Deutsche Hospitality). Then, in February 2020, close was reached on syndication, with a syndicate of 13 banks (but 17 lenders when including branches) — including the Shanghai, Hong Kong, Singapore, and Frankfurt Branches of Bank of China (BOC), the Bank of Communications (BoComm), China Merchants Bank, China Construction Bank Corporation (CCB), and the Shanghai and Macau Branches of Industrial and Commercial Bank of China (ICBC) — providing the €440,000,000 EUR syndicated term facility agreement to China Lodging Holdings (HK) Limited to support the acquisition of all the shares of Deutsche Hospitality. This term loan carried a maturity period of three years with a bullet repayment structure and an interest rate of EURIBOR plus a margin of 200 basis points (bps). The proceeds of the facility were to be used by the borrower to fund the payment of all amounts payable under or in connection with the acquisition of Deutsche Hospitality. BOC Shanghai, Hong Kong, Singapore, and Frankfurt Branches together contributed €61.2 million EUR to the loan syndicate, as captured by Records ID #101472, #110051, #110052, and #110053. BoComm contributed €44 million EUR to the loan syndicate, as captured by Record ID #101473. China Merchants Bank contributed €112.2 million EUR to the loan syndicate, as captured by Record ID #101474. CCB contributed €22 million EUR to the loan syndicate, as captured by Record ID #101475. ICBC Shanghai and Macau Branches together contributed €90 million EUR, as captured by Records ID #101476 and #110054. In addition to the Chinese state-owned banks, the following lenders contributed the respective amounts to the loan syndicate: the Hong Kong Branch of JPMorgan Chase Bank N.A. (€5.9 million EUR), the Hong Kong Branch of Deutsche Bank AG (€4.4 million EUR), Morgan Stanley Senior Funding, Inc. (€4.4 million EUR), China Minsheng Bank (€44 million EUR), Hang Seng Bank Limited (€23.7 million EUR), Siemens Bank GmbH (€15 million EUR), Chang Hwa Commercial Bank (€6.4 million EUR), and Taiwan Cooperative Bank (€6.4 million EUR). This term loan was a tranche of a roughly $1 billion USD syndicated loan that also featured a $500 million USD revolving credit facility, which all but BoComm also contributed too; however, the proceeds of that revolving credit facility were used by the borrower to refinance a $500 million USD borrowing from 2017 and not to support the cross-border acquisition. Deutsche Bank, JPMorgan, and Morgan Stanley served as the original mandated lead arrangers and bookrunners and launched syndication in November 2019. BOC, China Merchants Bank, ICBC, China Minsheng Bank, and Hang Seng Bank and Industrial and Commercial Bank of China joined in syndication as mandated lead arrangers and bookrunners (MLABs) as MLABs during syndication. CCB and BoComm joined in syndication as mandated lead arrangers (MLAs). Siemens joined in syndication as a lead arranger. Chang Hwa Commercial Bank and Taiwan Cooperative Bank joined in syndication as arrangers. The acquisition of Deutsche Hospitality was announced in November 4, 2019 for a consideration of €720 million EUR. Deutsche Hospitality leases, franchises, operates, and manages hotels under five brands in the midscale and upscale market in Europe, the Middle East, and Africa. The acquisition of a 100% equity interest in Deustche Hospitality was completed on January 2, 2020.