Narrative
Full Description
Project narrative
On November 29, 2019, a syndicate of 10 banks — including the Bank of China (BOC) and the Agricultural Bank of China (BOC) — entered into a $370 million AUD syndicated loan agreement with Australian electronics retailer Harvey Norman Holdings Limited for refinancing purposes via Amending Deed (No. 7) of Harvey Norman's syndicated facility agreement went into effect. The $370 million AUD facility was divided into a $170 million AUD Tranche A1 with a maturity period of two years, a final maturity date of December 4, 2021, and an opening interest margin of 120 basis points (bps) over BBSY and a $200 million AUD Tranche A2 with a maturity period of three years, a final maturity date of December 4, 2022, and an opening interest margin of 130 basis points (bps) over BBSY. The facility was secured by (i.e. collateralized against) fixed and floating charge granted by Harvey Norman and its subsidiaries in favor of a security trustee for the lenders and real estate mortgages granted by Harvey Norman and its subsidiaries in favor of the security trustee for the lenders over various real properties owned by Harvey Norman and its subsidiaries. In addition to BOC and ABC, the following banks contributed to this syndicated facility: Australia and New Zealand Banking Group (ANZ), Commonwealth Bank of Australia (CBA; CommBank), National Australia Bank Limited (NAB), Sumitomo Mitsui Banking Corporation (SMBC), Mega International Commercial Bank, Taiwan Cooperative Bank, First Commercial Bank, and Taiwan Business Bank (TBB). ANZ and CBA served as the mandated lead arrangers and bookrunners. Banks were invited to join the syndicated with commitments of $40 million AUD or more as lead arrangers, $25 million AUD to $40 million AUD as arrangers and less than $25 million AUD as managers. The banks' upfront fees were 20 bps and 30 basis points for the two tranches and all levels of commitments. Record ID#93168 captures BOC's contribution to Tranche A1. Record ID#93169 captures ABC's contribution to Tranche A1. Record ID#93170 captures BOC's contribution to Tranche A2. Record ID#93171 captures ABC's contribution to Tranche A2.
Staff comments
1. The individual contribution of the 10 lenders to $200 million AUD Tranche A2 of this syndicated loan is unknown. For the time being, AidData has estimated the contribution of ABC by assuming that each lender contributed an equal amount ($20,000,000 AUD) to the syndicated loan. 2. The Amending Deed (No. 7) to the Syndicated Facility Agreement enacted on November 29, 2019 specifically extended the repayment date of the $170 million AUD Tranche A1 to December 4, 2021 (two year maturity) and of the $200 million AUD Tranche A2 to December 4, 2022 (three-year maturity); this was strictly speaking not a new commitment of funds to Harvey Norman. However, AidData has yet to find evidence that BOC or ABC contributed to previous iterations of Harvey Norman's syndicated facility agreement, and amendments to syndicated loans often include provisions for the additions of new lenders (see pg.124 of "Harvey Norman Holdings Limited Annual Report 2020"). Therefore, for the time being, AidData assumes that the Amending Deed (No. 7) was the first instance of Chinese state-owned financial commitments to Harvey Norman, and has coded it as a new commitment accordingly. This issue merits further investigation. 3. AidData is calculating the loan's interest rate (2.235%) as the sum of the reported margin rate (130bps/1.30%) and the contemporary 6-month BBSY rate (0.935%). BBSY rate information was taken from this source: https://www.dropbox.com/scl/fi/vf4hmk3ca1b11nm8tyjkg/BBSW-and-BBSY-Daily-Reference-Rates-2000-to-2023.xlsx.xlsx?cloud_editor=gsheet&dl=0&rlkey=ozq8sa1itiq8kmpnqhdb6jndh#gid=544580120