Bank of China participates in EUR 535 million syndicate bridge loan to Bulgaria Energy Holdings (BEH) for debt consolidation purposes

On April 21, 2016, Bulgarian Energy Holding EAD (BEH or BEH EAD) — a state-owned energy holding company in Bulgaria — signed an EUR 535 million syndicated bridge loan facility agreement with a group of banks (including Bank of China) to provide funds to its subsidiary (National Electricity Company, NEK or NEK EAD) to help it finance the payment of arrears (overdue debts) to AES-3C Maritza East I EOOD and ContourGlobal Maritsa East 3 AD in connection with the renegotiation of the long-term power purchase agreements, as well as financing the payments to other power generators. The members of the lending syndicate included Banca IMI S.p.A., London Branch, Bank of China (Luxembourg) S.A. J.P. Morgan Europe Limited, and J.P. Morgan Securities plc. The loan carried a 12 month maturity and a 4.25% interest rate. It matured on April 25, 2017, and as of July 29, 2016, the loan had been fully utilized. It was refinanced through and EUR 550 million 4.875% bond issue on August 2, 2016. Interest on the bonds was payable annually on August 2 of each year, beginning on August 2, 2017. Unless previously redeemed or purchased and cancelled, the bonds will be redeemed at their principal amount on August 2, 2021. BEH used the net proceeds from the issue of the bonds to repay the bridge facility. The remaining net proceeds from the issue of bonds after repayment of the bridge facility could be used for general corporate purposes by the BEH. TPP Maritsa East 2 EAD ("TPP Maritsa East 2") owns the largest lignite-fired thermal power plant ("TPP") in Bulgaria with installed capacity of 1,620 MW. In 2017, the Maritsa TPP accounted for 20 per cent of Bulgaria's total electricity generation. AES-3C Maritza East I EOOD is a special purpose company that was established to build, own and operate a 2 x 300 MW net lignite-fired power plant (ME1) at Maritsa, Bulgaria. ContourGlobal Maritsa East 3 AD is a special purpose company that operates the thermal power plant (TPP) TETs Maritsa East 3. Bulgarian Energy Holding EAD is a state-owned energy holding company in Bulgaria. Natsionalna Elektricheska Kompania EAD (NEK or NEK EAD) is a single-owned joint-stock electric company headquartered in Sofia, Bulgaria.

Additional details

1. For the time being, AidData has estimated the contribution of the Chinese state-owned bank by assuming that the four lenders contributed equal amounts (EUR 133,750,000) to the loan syndicate.

Number of official sources

1

Number of total sources

7