ICBC (London) plc participates in $300 million syndicated pre-export facility for JSC Acron (Russia) (linked to Project ID#92489)

On May 10, 2012, JSC Acron (Russia) signed a $300 million, five-year syndicated structured pre-export finance facility agreement with a group of 7 lenders. The members of the lending syndicate included HSBC, ING Bank N.V., Natixis, Intesa Sanpaolo London branch, ICBC (London) plc, ZAO Industrial and Commercial Bank of China (Moscow) and Rosbank (OSJC JSCB). The facility carried an interest rate of one-month LIBOR plus a 4.95% margin and was to be used towards working capital, general corporate purposes and refinancing the company’s existing financial indebtedness. The loan was to be repaid by equal monthly installments following a 6-month grace period effective the day of credit facility signing. The deal was structured based on a pre-export financing scheme. HSBC served as the mandated lead arranger, sole bookrunner, facility agent bank, security agent, and the major lender. ICBC (London) plc's contribution to the syndicated loan is captured in Project ID#92484. ZAO Industrial and Commercial Bank of China (Moscow)'s contribution to the syndicated loan is captured in Project ID#92489.

Additional details

1. Acron is a global mineral fertiliser producer of complex fertilisers such as NPK and bulk blends, and nitrogen fertilisers such as urea, ammonium nitrate and urea-ammonium nitrate. The Group's key markets are Russia, Brazil, Europe and the United States. Acron has two production facilities – Acron (Veliky Novgorod, Russia) and Dorogobuzh (Smolensk Region, Russia). Acron's logistics and transportation capabilities include its own fleet of railway cars and three sea port trans-shipment facilities on the Baltic Sea – at the Kaliningrad port of Russia, at the Estonian Sillamäe port and at the Estonian Muuga port. 2. A pre-export finance (PXF) facility an arrangement in which a commodity (e.g. oil) 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. 3. The size of the contribution from ICBC (London) plc and the contribution from ZAO Industrial and Commercial Bank of China (Moscow) to the loan syndicate is unknown. For the time being, AidData assumes equal contributions ($42,857,142.90) to the loan syndicate across the 7 participating banks. 4. AidData has estimated the all-in interest rate by adding 4.95% to the average 1-month LIBOR rate in May 2012 (0.239%).

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