China Eximbank contributes $107.8 million USD to a $215.7 million USD syndicated loan to Toisa Ltd. to finance the acquisition of three Aframax tankers and three Suezmax tankers

Project narrative

On June 14, 2016, the Export-Import Bank of China and Citibank N.A. signed a $215.7 million senior secured credit facility agreement with Toisa Ltd. to finance the construction of a total of six vessels: three Aframax tankers and three Suezmax tankers. The loan carried a term (maturity) of seven years post-delivery or up to 9.5 years from signing, and an interest rate of LIBOR plus a margin of 1.95% for Citibank's contribution and a margin of 4.35% for China Eximbank's contribution. Toisa Ltd.’s repayment obligations under the loan were secured by (i.e. collateralized by) an assignment of the shipbuilding contract and refund guarantees and liens on the vessels upon delivery, including assignment of insurance and charters. Citi Europe PLC served as agent and security trustee. Trade & Transport, Inc. (T&T), the holding company of Toisa Ltd, and some of its subsidiaries issued a corporate loan repayment guarantee dated as of June 14, 2016, pursuant to which they undertook to guarantee the Toisa Ltd.’s repayment obligations in connection with this facility. China Eximbank and Citibank each contributed $107,850,000 USD — half of the loan's proceeds — to the syndicated loan. As of January 2017, the unpaid principal balance on the loan was approximately $24,034,500 USD. The proceeds of the loan were used to to finance shipbuilding contracts between T&T as the buyer and China Shipping Industry Co., Ltd. and China Shipping Industry (Jiangsu) Co., Ltd. as the sellers entered on June 2, 2015 for three Aframax tankers and three Suezmax tankers, with the hull numbers CIS158K-01, CIS158K-02 CIS158K-03, CIS114K-01, CIS114K-02, and CIS 114K-03. On January 29, 2017, Toisa Ltd. filed for Chapter 11 bankruptcy protection under the United States Bankruptcy Code in Manhattan, New York. Toisa suffered from falling demand for use of its oil and gas supply vessels due to a collapse in oil prices, leaving it short of cash. China Shipping Industry filed Proofs of Claims No. 88 and No. 89 against T&T seeking an unsecured claim no less than $23,115,00 USD and an administrative claim no less than $18,870,000 USD for unpaid balances under the contracts, and unliquidated amounts if the contract was rejected or further payments were missed, as of August 8, 2017. On October 31, 2018, Toisa sought approval to transfer the contracts for the six vessels to six special purpose vehicles guaranteed by Zodiac Maritime Limited. The U.S. Bankruptcy Court approved the deal on November 13, 2018, and the transaction was closed on December 20, 2018. As a result, China Shipping Industry disallowed Claims No. 88 and No. 89 in their entirety because the sale to Zodiac cured the defaults under the shipbuilding contracts, and Zodiac assumed all liabilities thereunder, leaving Toisa with no liability under these contracts. Then, in March 2019, a New York bankruptcy judge approved a plan to wind down and distribute assets of Toisa Ltd. after overruling an objection to the way it gathered consent to release company executives and other third parties from potential claims in the future.