ICBC contributes $22 million USD to a $450 million USD syndicated revolving credit facility for the Los Angeles International Airport Terminal 1.5 Project

Project narrative

On October 12, 2017, financial close was reached on a deal in which a syndicate of 16 banks — including the Bank of China (BOC) and the Industrial and Commercial Bank of China (ICBC) — entered into a $450.00 million USD syndicated revolving credit facility (RCF) agreement with Regional Airports Improvement Corporation (RAIC) — a California-incorporated non-profit public benefit entity for financing airport works for for the purpose of assisting the City of Los Angeles that acts as a quasi-governmental special purpose entity — as conduit borrower (on-lender) for Southwest Airlines Co. — a Texas-incorporated major American airline headquartered in Dallas, Texas and listed on the New York Stock Exchange — for the Los Angeles International Airport Terminal 1.5 Project. This RCF carried a maturity period of four years and a final maturity date of October 12, 2021. Southwest Airlines Co. issued a guarantee for the RCF. The RCF would be repaid with the proceeds of payments from the Los Angeles World Airports (LAWA), the airport authority for the City Government of Los Angeles, to purchase the completed construction phase. BOC and ICBC each contributed $22.00 million USD, as captured by Record ID#110861 and #110862. In addition to BOC and ICBC, the following lenders contributed to the loan syndicate: Bank of America ($33.00 million USD), BOKF, N.A. ($16.00 million USD), BNP Paribas S.A. ($22.00 million USD), CaixaBank ($22.00 million USD), Citibank, N.A. ($33.00 million USD), Comerica Bank ($22.00 million USD), Commonwealth Bank of Australia (CBA) ($22.00 million USD), ING Bank N.V. ($22.00 million USD), JPMorgan Chase Bank, N.A. ($33.00 million USD), Standard Chartered Bank plc ($22.00 million USD), Sumitomo Mitsui Banking Corporation (SMBC) ($33.00 million USD), Sumitomo Mitsui Trust Holdings, Inc. ($16.00 million USD), U.S. Bank National Association ($55.00 million USD), and Wells Fargo Bank ($55.00 million USD). As of December 31, 2019, $176 million USD was outstanding under the RCF. The proceeds were used to finance the construction of a new four-story building, Terminal 1.5, located between and connecting Terminals 1 and 2 at the Los Angeles International Airport (LAX) in Westchester, Los Angeles, California. It included additional space for passenger ticketing, baggage check-in, a six-line security screening area, an outbound baggage system with checked baggage inspection (CBIS), an inbound baggage system, additional baggage claiming space, a secure passenger connection office, support space for mechanical, electrical, plumbing, and information technology (IT) systems, 23,000 square feet of leasable office space, 12 escalators, five elevators, a bus depot, and a further 13th gate for Terminal 1 (Gate 12A), a loading dock to remove delivery traffic off Taxiway D8, art installations, a stormwater collection and management system, advanced lighting control system, energy efficient air-handling units, and the first Automated People Mover (APM) Terminal Vertical Core at LAX. In total, Terminal 1.5 provided 240,000 square feet of usable space. The project used 35% recycled material content. Terminal 1.5 was meant to reduce congestion and improve connectivity between Terminal 1 and 2 with ticketing and check-in and post-security screening, with Terminal 1.5’s post-security airside pedestrian connection allowing passengers connecting between the two terminals to no longer leave the secured area of the concourse, exit the building, and go through security again to make a connection. In October 2017, Southwest Airlines entered into a lease agreement with LAWA for Terminal 1.5 in which Southwest would oversee and manage the design, development, financing, construction, and commissioning of Terminal 1.5. The project was expected to cost no more $479 million USD. The project ultimately cost $477.5 million USD. Hensel Phelps served as general contractor. PGAL served as architect. Saiful Bouquet Structural Engineers served as structural engineer. Construction began during third quarter 2017 and was estimated to be completed during 2020. The project was completed in 2021.