ICBC participates in $1.3 billion syndicated pre-export finance facility to Siberian Coal Energy Company for debt refinancing purposes

On October 28, 2011, the Industrial and Commercial Bank of China (ICBC) contributed to a five-year, USD 1.3 billion pre-export syndicated finance (PXF) facility at LIBOR + 2.7% to Siberian Coal Energy Company (SUEK) to refinance existing corporate debt. The average 6-month LIBOR in October 2011 was 0.595%, so the interest rate has been calculated as 0.595 +2.7 = 3.295%. ICBC's specific contribution is unknown. The participants in the syndicate included ING, UniCredit, The Bank of Tokyo-Mitsubishi UFJ, Commerzbank, HSBC, Nordea, Raiffeisen Bank, Societe Generale, Rosbank, Bank of America Securities Limited, Rabobank International, Deutsche Bank, Barclays Capital, Industrial and Commercial Bank of China, Sumitomo Mitsui and Credit Agricole.

Additional details

1. The exact size of ICBC’s contribution is unknown. For the time being, AidData assumes that all 16 members of the lending syndicate contributed equally ($81,250,000) to the $1.3 billion loan. 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. 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.

Number of official sources

2

Number of total sources

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