China Construction Bank (New Zealand) contributes to a $925 million NZD revolving credit facility in 2018 to Fletcher Building for refinancing purposes

Project narrative

In 2018, after Fletcher Building Limited incurred serious losses from its Building + Interiors arm that put it in danger of breaching its financial covenants, it sought refinancing of an existing commercial bank facility to avoid an event of default. After receiving an initial waiver of the breach, Fletcher Building had a March 31, 2018 deadline to find new terms or enter into default. Fletcher Building managed to negotiate an extension of waiver. Then, on April 17, 2018, a syndicate of nine banks — including Bank of China (New Zealand) Limited (BOC New Zealand) and China Construction Bank (New Zealand) Limited (CCB NZ) — entered into a $925 million NZD syndicated revolving credit facility (RCF) with Fletcher Building Limited — a New Zealand-incorporated building materials manufacturer and supplier headquartered in Auckland and listed on the New Zealand Exchange and the Australian Securities Exchange — for refinancing purposes. This RCF was on an unsecured, negative pledge and borrowing covenant basis and funds under this facility could be borrowed in United States, Australian, and New Zealand dollars. The proceeds were used by the borrower to refinance its existing syndicated facility. Record ID#91237 captures BOC New Zealand's contribution. Record ID#92408 captures CCB NZ's contribution. In addition to BOC New Zealand and CCB NZ, the following banks contributed to this syndicated RCF: ANZ Bank New Zealand Limited, MUFG Bank Limited, Bank of New Zealand (BNZ), Commonwealth Bank of Australia (CBA; CommBank), Citibank N.A., the Hongkong and Shanghai Banking Corporation Limited (HSBC), and Westpac New Zealand Limited. As of June 30, 2019, this RCF was composed of a $200 million NZD tranche that had a maturity date of November 2019 (a maturity period of about 1.5 years), a $350 million NZD tranche that had a maturity date of November 2020 (a maturity period of about 2.5 years), and a $375 million NZD tranche that had a maturity date of November 2022 (a maturity period of about 4.5 years). As a result of its divestment from Formica, Fletcher Building was required to make a mandatory disposition pre-payment offer on a rateable portion (33%) on its senior debt, including this RCF, leading to $85 million NZD of its bank loans being classified as current as of June 30, 2019. Then, on July 22, 2019, a syndicate of nine banks — including BOC New Zealand and CCB NZ — entered into a $925 million NZD syndicated RCF with Fletcher Building for refinancing. The RCF was divided into two tranches: a $525 million NZD tranche with a maturity period of three years and a final maturity date of July 2022 known as 'Tranche 1' and a $400 million NZD tranche with a maturity period of five years and a final maturity date of July 2024 known as 'Tranche 2'. The RCF was an unsecured, negative pledge, and borrowing covenant basis. The funds under this refinanced RCF could be borrowed in United States, Australian, and New Zealand dollars. Record ID#91495 captures BOC New Zealand's contribution. Record ID#110905 captures CCB NZ's contribution. In addition to BOC New Zealand and CCB NZ, the following lenders contributed to the loan syndicate: ANZ Bank New Zealand Limited, MUFG Bank, BNZ, Citibank, HSBC, and Westpac New Zealand Limited. On June 10, 2020, the lending syndicate entered into an agreement with the borrower to amendment the RCF's covenant testing to be more favorable in exchange for agreeing to not pay a dividend into compliance with the normal covenant levels. As of June 30, 2020, $400 million NZD was drawn under the RCF. As of June 30, 2021, the entire RCF was undrawn. Between July 1, 2021 and December 30, 2021, the lending syndicate — still including all members, including BOC New Zealand and CCB NZ — entered into an amendment agreement with Fletcher for the RCF; in the amendment, the lenders extended the maturity period of the $525 million NZD tranche, with a $200 million NZD portion extended by two years — for a new maturity period of five years — to mature on July 22, 2024 and to be known as 'Tranche 1' and a $325 million NZD portion extended by 4.333 years — for a new maturity period of 7.333 years — to mature in November 2026. Furthermore, the RCF was amended to replace senior and total interest cover covenants with a senior interest cover covenant only. Record ID#110906 captures BOC New Zealand's contribution. Record ID#110907 captures CCB NZ's contribution. Then, apparently between January 1, 2022 and June 30, 2022, the lending syndicate — still including all members, including BOC New Zealand and CCB NZ — entered into an another amendment agreement with Fletcher for the RCF; in the amendment, the original $400 million NZD Tranche 2 was extended by three years — for a new maturity period of eight years — to mature in July 2027. Record ID#110908 captures BOC New Zealand's contribution. Record ID#110909 captures CCB NZ's contribution. On October 31, 2022, a syndicate of 11 banks — including the Auckland Branch of the Bank of China (BOC) and the Industrial and Commercial Bank of China (ICBC) — entered into a $674.5 million AUD syndicated RCF with Fletcher that was added as 'Tranche D' to the existing $925 million NZD RCF. Tranche D carried a maturity period of three years and a final maturity date in October 2025 and could only be drawn down in Australian dollars. Record ID#110919 captures BOC's contribution. Record ID#110920 captures ICBC's contribution. In addition to BOC and ICBC, the following lenders contributed to Tranche D: ANZ, Westpac Banking Corporation, the Sydney Branch of MUFG Bank, the Sydney Branch of HSBC, Mizuho Bank, the Sydney Branch of Citibank N.A., First Commercial Bank Ltd, the Sydney Branch of Hua Nan Commercial Bank Ltd (HNCB), and Taiwan Cooperative Bank Ltd.. On May 31, 2023, the lending syndicate — unclear if still including BOC New Zealand and CCB NZ — entered into an amendment agreement with Fletcher; in the amendment, the $200 million NZD portion was extended by 3.833 years — for a new maturity period of 8.833 years — to mature on May 31, 2028. On June 4, 2024, the lending syndicate entered into an amendment with the borrower; in the amendment, the maturities of the tranches were scheduled and the $674.5 million AUD RCF was to be refinanced by a $424.5 million AUD tranche to mature in July 2027 and a $250 million AUD tranche to mature June 2029.