Narrative
Full Description
Project narrative
In December 2005, CDB participated in a credit facility agreement with Megafon worth 51 million USD to be used for the purchase of Huawei equipment. The facility has an interest rate of LIBOR + 2.5%. The average 6-month LIBOR in December 2005 was 4.666%, so the interest rate has been calculated as 4.666 + 2.5 = 7.166%. The other banks involved in the facility were Citibank International Plc. and Citibank N.A London Branch. MegaFon refers to the facility as "China Development Bank Credit.", the majority of the financing may be provided by CDB. The deal was approved by Megafon's board of directors on November 14, 2005. In December 2007, MegaFon early repaid the total amount outstanding under the credit facility. It was not stated how much was drawn down. The amounts drawn were repayable in semi-annual installments from 2007 through 2011. CDB has provided several loan facilities to MegaFon. See Record ID#66916 for CDB II, #66917 for CDB III, #66936 for CDB IV, #66953 for CDB V, #66939 for CDB VI, and #66954 for CDB VII.
Staff comments
For the time being, AidData has estimated the contribution of the Chinese state-owned bank by assuming that the three lenders contributed equal amounts ($17,000,000) to the loan syndicate.