Bank of China participates in $212.5 million syndicated loan facility to Mobile Telesystems to refinance purchase orders from Chinese companies

On December 8, 2009, MTS entered into a framework agreement in respect of Euro term loan facilities with Bank of China Limited, Shenzhen Branch and BNP Paribas allowing borrowings of up to $212.5 million in Euros. The loan was provided to refinance purchase orders with certain Chinese counterparts. It carried an interest rate of six-month EURIBOR plus a 1.95% margin and a final maturity date is December 8, 2016. Sinosure provided credit insurance for the loan. The loan was subject to a number of early repayment events, including, without limitation, default under MTS’ and its subsidiaries’ other indebtedness over a certain amount, material adverse change and material litigation (subject to certain specific carve-outs). MTS obtained waivers under the Euro term loan facilities with Bank of China and BNP Paribas in relation to any default arising from the Nomihold Award and MTS’ failure to pay under the Intercompany Loan Agreement. The loan agreement stipulated that the funds could only be used to buy equipment from Huawei. MTS could take the loan funds as long as equipment is supplied over two years from the moment of the agreement's signing. As of December 31, 2011, the total amount outstanding under the loan agreement was $116.8 million.

Additional details

1. For the time being, AidData has estimated the contribution of the Chinese state-owned bank by assuming that the two lenders contributed equal amounts ($106,250,000) to the loan syndicate. 2. The commitment year has been marked as uncertain, as AidData only has record of a framework agreement being signed in 2009. 3. As it is denominated in USD/Euros, provided to a foreign recipient, explicitly identified in face value, insured by Sinosure, and intended to refinance purchase orders with certain Chinese counterparties, this loan is likely an export buyer's credit facility. 4. Average 6-month EURIBOR in December 2009 was 1.49%, so the all-in interest rate has been estimated as 1.49 + 1.95 = 3.44%.

Number of official sources

1

Number of total sources

4