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Overview

CCB (Russia) contributes to EUR 650 million tranche of PxF facility to Uralkali for refinancing and general corporate purposes

Commitments (Constant USD, 2023)$58,125,681
Commitment Year•2019Country of Activity•RussiaDirect Recipient Country of Incorporation•RussiaOverseas Jurisdiction•RussiaSector•Industry, Mining, ConstructionFlow Type•Loan

Status

Project lifecycle

Completion

Pipeline: PledgePipeline: CommitmentImplementationCompletion

Timeline

Key dates

Commitment date
May 31, 2019
First repayment (originally scheduled)
May 30, 2021
Last repayment (originally scheduled)
May 29, 2024

Stakeholders

Organizations involved in projects and activities supported by financial and in-kind transfers from Chinese government and state-owned entities

Ultimate beneficial owners

At least 25% host country ownership

Funding agencies

State-owned Commercial Banks

  • China Construction Bank (Russia) Limited (CCB (Russia))

Cofinancing agencies

Private Sector

  • Alfa-Bank JSC
  • AO Raiffeisenbank
  • AO UniCredit Bank
  • BofA Securities, Inc. (Formerly Bank of America Merrill Lynch (BAML))
  • Commerzbank Aktiengesellschaft (Commerzbank AG)
  • Crédit Agricole Corporate and Investment Bank (CACIB) (Crédit Agricole CIB) (Formerly Calyon) (Formerly Crédit Agricole Indosuez (CAI))
  • Deutsche Bank AG
  • ING Bank N.V.
  • Intesa Sanpaolo Bank Ireland P.L.C. (formerly Sanpaolo IMI Bank Ireland P.L.C.)
  • MUFG Bank, Ltd. (Formerly Bank of Tokyo-Mitsubishi UFJ, Ltd. (BTMU))
  • Natixis
  • Société Générale S.A. (SocGen or Societe Generale)

Receiving agencies

Private Sector

  • PJSC Uralkali

Collateral providers

Private Sector

  • PJSC Uralkali

Security / collateral agents

Private Sector

  • Crédit Agricole Corporate and Investment Bank (CACIB) (Crédit Agricole CIB) (Formerly Calyon) (Formerly Crédit Agricole Indosuez (CAI))

Loan description

CCB (Russia) contributes to USD $725 million tranche of PxF facility to Uralkali for refinancing and general corporate purposes

Grace period•2 yearsInterest rate (t₀)•1.45%Interest type•Variable Interest RateLoan tenor•6-month rateMaturity•5 years

Collateral

This facility was likely secured by (1) an assignment of rights by the producer under an ‘offtake contract’ (i.e., a sale and purchase contract between the producer and a buyer of that producer of goods or commodities), and (2) a collection account charge over a bank account into which proceeds due to the producer from the buyer of the goods or commodities under the offtake contract are credited.

Narrative

Full Description

Project narrative

On May 31, 2019, China Construction Bank (Russia) Limited participated in an approximately USD $1.45 billion syndicated pre-export finance (PxF) facility agreement to PJSC Uralkali, a Russian potash producer. The loan consisted of a USD $725 million tranche and a EUR 650 million tranche, both of which CCB Russia participated in. Both tranches had a maturity of 5 years, a grace period of 2 years, and linear amortization. The USD tranche carried an interest rate of LIBOR plus 190 bps. The EUR tranche carried an interest rate of EURIBOR plus 170 bps. CCB Russia's contribution to the USD tranche was $55.77 million and is captured in Record ID#110691 and its estimated EUR 50 million contribution to the EUR tranche is captured in Record ID#110983. The following banks also participated in the syndicate: Crédit Agricole Corporate & Investment Bank (as Mandated Lead Arranger, Bookrunner, Global Coordinator); Commerzbank Aktiengesellschaft Luxembourg Branch (as Mandated Lead Arranger and Bookrunner); ING Bank (as Mandated Lead Arranger, Bookrunner, Global Coordinator, and Documentation Agent); Natixis, Societe Generale, AO Alfa-Bank SGBTCI, and AO UniCredit Bank (as Mandated Lead Arrangers and Bookrunners); Intesa Sanpaolo Bank Ireland Plc and MUFG Bank, Ltd. (as Mandated Lead Arrangers); Bank of America Merrill Lynch (as Lead Arranger); and AO Raiffeisenbank and Deutsche Bank AG (as Arrangers). CCB Russia acted as a Lender. Crédit Agricole Corporate & Investment Bank also served as Facility and Security Agent. ING Bank (Eurasia) JSC, PJSC ROSBANK, and AO UniCredit Bank were the Russian Account Banks for the facility. Loan proceeds were to be used for refinancing existing debts and general corporate purposes.

Staff comments

1. Uralkali is one of the world’s largest potash producers and exporters. The company’s assets consist of 5 mines and 7 ore treatment plants in the towns of Berezniki and Solikamsk (Perm Region, Russia). 2. A pre-export finance (PXF) facility is an arrangement in which a commodity producer gets up-front cash from a customer in return for a promise to repay the customer with that commodity (possibly at a discount) in the future. PXF funds may be advanced by a lender or syndicate of lenders to a commodity producer to assist the company in meeting either its working capital needs (for example, to cover the purchase of raw materials and costs associated with processing, storage and transport) or its capital investment needs (for example, investment in plant and machinery and other elements of infrastructure). PXF facilities are usually secured by (1) an assignment of rights by the producer under an ‘offtake contract’ (i.e., a sale and purchase contract between the producer and a buyer of that producer of goods or commodities), and (2) a collection account charge over a bank account into which proceeds due to the producer from the buyer of the goods or commodities under the offtake contract are credited. As such, AidData has assumed that this facility is both collateralized and commodity-backed. There are two key documents in prepayment finance transactions: a contract providing for the advance payment by the offtaker to the producer for the purchase of goods/commodities (the 'Prepayment Contract'), and a loan agreement between a lender and the offtaker (the 'Offtaker Loan Agreement') under which the advance payment is financed. Due to to various international sanctions imposed upon Russia, PXF facilities are one of the fews ways in which commodity producers (borrowers) can borrow in foreign currency. 3. AidData assumes that the reference rate was based on a 6-month EUROBOR rate in absence of alternate information and estimates the 'all-in' interest rate at the time the loan agreement was signed based on this. 4. The precise contribution of CCB Russia to the EUR tranche of this loan is unknown. For the time being, AidData assumes all 13 lenders contributed equally (50,000,000 EUR) to the EUR 650 million tranche.