Narrative
Full Description
Project narrative
On March 23, 2020, financial close was reached on a deal in which a syndicate of 22 banks — including Bank of China — entered into a €15.000 billion EUR ($16.173 billion USD) syndicated term loan agreement with Airbus SE. The maturity of the loan was not disclosed, and the interest rate is not specified in available documentation. The proceeds were used to support the company’s liquidity during the COVID-19 pandemic. While Bank of China contributed to this loan, the following lenders also participated: JP Morgan, BNP Paribas, Crédit Agricole Corporate and Investment Bank, HSBC, Société Générale, Santander, Natixis, UniCredit, BBVA, Deutsche Bank, Mizuho Bank, Morgan Stanley, Sumitomo Mitsui Banking Corporation, Commerzbank, Lloyds TSB, NatWest Markets, Royal Bank of Canada, Citigroup, Crédit Industriel et Commercial, Goldman Sachs, and Bank of America.
Staff comments
1. The entirety of the loan contracts is not available. Airbus did not publicly disclose the exact tenor in its announcement, but subsequent events imply the facility was intended to be short-term. Airbus began “terming out” (refinancing) portions of the €15 billion within weeks: on March 31, 2020 it issued €2.5 billion in bonds, and on June 2 an additional €3.5 billion, specifically to partially pay down the €15 billion EUR credit line. By October 2020 – roughly 7 months after signing – Airbus was able to cancel a chunk of the 15 billion facility and replace it with a longer-term €6 billion RCF (3-year tenor) for more permanent liquidity. These actions indicate the original €15 billion EUR line was expected to be a temporary backstop. 2. Airbus SE (formerly EADS) is a European multinational aerospace corporation headquartered in Leiden, Netherlands, but daily management is conducted from the company's main office located in Blagnac, France due to its strong French roots. The company was originally created through the merger of French, German companies with the additions of Spanish and British companies. It designs, manufactures, and sells civil and military aerospace products worldwide and has three main divisions: Commercial Aircraft, Defence and Space, and Helicopters. 3. During the pandemic in 2020, Airbus and other airplane companies experienced significant financial downturns. As a result, the company used this instrument to weather the protracted industry downturn. Notably, management emphasized that this was a purely commercial financing, not a government-backed loan – the €15 billion credit line was arranged with banks on market terms and did not utilize France’s state guarantee program. 4. AidData does not have access to the terms (maturity and interest rates) of the loan. 5. For the March 2020 facility, the individual contributions of each lender are unknown; AidData has estimated BOC's contribution by assuming that each of the 22 lenders contributed an equal amount (€681.8 million euros).