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Overview

ICBC and BNP Paribas provide $201 million syndicated loan to Gerdau Açominas for purchase of steel mill equipment

Commitments (Constant USD, 2023)$201,435,217
Commitment Year•2005Country of Activity•BrazilDirect Recipient Country of Incorporation•BrazilSector•Industry, Mining, ConstructionFlow Type•Loan

Status

Project lifecycle

Completion

Pipeline: PledgePipeline: CommitmentImplementationCompletion

Timeline

Key dates

Commitment date
Oct 14, 2005
End (actual)
Oct 30, 2007
Last repayment (originally scheduled)
Oct 11, 2017

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

  • Industrial and Commercial Bank of China (ICBC)

Cofinancing agencies

Private Sector

  • BNP Paribas S.A.

Receiving agencies

Private Sector

  • Gerdau Açominas S.A.

Implementing agencies

State-owned companies

  • China Metallurgical Group Corporation
  • Minmetals Development Co., Ltd.

Guarantors

Private Sector

  • Gerdau S.A.

Insurance providers

State-owned companies

  • China Export & Credit Insurance Corporation (Sinosure)

Loan description

ICBC contribution to USD 201 million syndicated loan to Gerdau Açominas for purchase of steel mill equipment

Grant element•19.4872%Interest rate (t₀)•5.025%Interest type•Variable Interest RateMaturity•12 years

Narrative

Full Description

Project narrative

On October 14, 2005, Gerdau Açominas -- a private Brazilian company --- signed a $201 million syndicated buyer’s credit facility agreement with the Industrial and Commercial Bank of China (ICBC) and BNP Paribas. The loan carried an annual interest rate of LIBOR plus a 0.675% margin a 12 year maturity. It was backed by a Sinosure credit insurance policy and a corporate guarantee from Gerdau S.A. The borrower was expected to use the proceeds of the loan to finance 85% of the cost of commercial contracts signed by Gerdau Açominas, Minmetals Development Co. Ltd., China Metallurgical Construction (Group) Corporation and other Chinese corporations. These commercial contracts supported the construction of a blast furnace, a coke oven plant, and a sinter plant for Gerdau Açominas’ capacity expansion plan throughout 2007. These facilities are located in Ouro Branco, Minas Gerais (exact coordinates: -20.543507, -43.752950). The new blast furnace was put into operation on October 30, 2007.

Staff comments

1. Gerdau Açominas, a subsidiary of Brazilian steelmaker Gerdau S.A., is engaged in the production and sale of steel plate, blocks, billets, and structural profiles. It is a private company. 2. ICBC and BNP Paribas each reportedly contributed $100.5 million to the loan syndicate.