CDB provides $42.5 million buyer’s credit loan for Huawei Fiber Optic Network Project (Linked to Project ID#66440)

On July 10, 2014, China Development Bank (CDB) and PT MNC Kabel Mediacom (MKM) — a subsidiary of PT Global Mediacom Tbk (BMTR) — signed a $42.5 million buyer’s credit loan agreement for the Huawei Fiber Optic Network Project. PT Bank Rakyat Indonesia Tbk served as the Security Agent for the loan and BMTR served as the Guarantor of the loan. The carried a term of 7 years, including a grace period of 3 years, with an interest rate of 6-month LIBOR plus a 4.85% margin (without Sinosure insurance), or 6-month LIBOR plus a 3.45% margin (with Sinosure insurance). It is unclear if the borrower ultimately purchases the buyer’s credit insurance from Sinosure. The borrower was to use the proceeds of the loan to purchase goods and/or services from Huawei Technologies Co., Ltd. and thereby build a fiber-optic network. MKM also secured an $85 million buyer’s credit loan for a ZTE Fiber Optic Network Project (captured in Project ID#66440).

Additional details

1. PT Global Mediacom Tbk (BMTR) is a private Indonesian media company. 2. No sources explicitly state that this is a buyer's credit loan. AidData assumes this is the case for the following reasons: (1) The loan is provided to a foreign borrower, (2) the loan is denominated in USD, (3) the face value of the loan is explicitly identified in multiple official sources, (4) the loan is used to procure equipment from a Chinese company, and (5) the loan may have been insured by Sinosure, which provides export credit insurance. 3. AidData has coded this transaction as a collateralized loan because PT Bank Rakyat Indonesia Tbk was selected as the security agent (i.e. collateral agent) for the loan. When lenders take collateral as security for their loans, a collateral/security agent is often appointed to enforce rights against the collateral in the event of the borrower’s default under the loan. 4. For the time being, AidData has estimated the all-in interest rate (4.478%) by adding average 6-month LIBOR in July 2014 (0.328%) to the midpoint of the 3.45%-4.85% margin range (4.15%).

Number of official sources

5

Number of total sources

8