Narrative
Full Description
Project narrative
On May 19, 2009, a syndicate of 12 banks — including the Hong Kong, Sydney, and Tokyo Branches of Bank of China (BOC), the Bank of Communications (BoComm), and Nanyang Commercial Bank (NCB) — signed a $450 million AUD ($350 million USD) syndicated loan agreement with Australian telecommunications firm Telstra Corporation. The $450 million AUD loan was provided in Australian and U.S. dollars, and was divided into a $290 million AUD-equivalent Tranche A that carried a maturity period of three years and an interest rate dependent on Telstra's corporate rating, ranging from LIBOR or BBSW plus a margin of 140 basis points (bps) to 220 bps and a $160 million AUD Tranche B that carried a maturity period of five years, and an interest rate depending on Telstra's corporate rating, ranging from LIBOR or BBSW plus a margin of 180 bps to 260 bps. The senior unsecured funds were intended for Telstra's general corporate purposes and for working capital purposes. In addition to BOC, BoComm, and NCB, the following banks contributed to this loan: Bank of Tokyo-Mitsubishi UFJ, Ltd. (BTMU), Chuo Mitsui Trust Holdings, Inc. (now known as Sumitomo Mitsui Trust Holdings, Inc., which has Sumitomo Mitsui Trust Bank, Limited (SMTB) as its main operating company), Taiwan Cooperative Bank, Chang Hwa Commercial Bank, Bank of Taiwan, Cathay United Bank, and Hua Nan Commercial Bank (HNCB). BOC Hong Kong, Sydney, and Tokyo, NCB, and BTMU served as mandated lead arrangers; Chuo Mitsui Trust and Bank of Communications served as lead arrangers; Taiwan Cooperative Bank, Chang Hwa, Bank of Taiwan, Cathay United, and HNCB served as managers. The breakdown of contributions to Tranche A is as follows: BOC Hong Kong ($75 million AUD), BOC Tokyo ($20 million AUD), BOC Sydney ($50 million USD), BoComm ($20 million USD), NCB ($15.5 million USD), Chuo Mitsui Trust ($30 million USD), Taiwan Cooperative Bank ($15 million AUD), Chang Hwa ($10 million USD), Cathay United ($5 million USD), and HNCB ($5 million USD) : BTMU contributed $150 million AUD and Bank of Taiwan contributed $12 million AUD to Tranche B. Record ID #93205 captures BOC Hong Kong Branch's $75 million AUD contribution to Tranche A. Record ID #109949 captures BOC Tokyo Branch's $20 million AUD contribution to Tranche A. Record ID #93206 captures BOC Sydney's $50 million USD contribution to Tranche A. Record ID #93207 contributes Bank of Communications' $20 million USD contribution to Tranche A. Record ID #93208 captures NCB's $15.5 million USD contribution to Tranche A.
Staff comments
1. The interest rate for Tranche A was based on LIBOR or BBSW plus a margin of 140 basis points (bps) to 220 bps dependent on Telstra's corporate rating, ranging from LIBOR or BBSW plus a margin of 140 basis points (bps) to 220 bps. Based on Telstra's rating of A from Standard & Poor's and of A2 from Moody's Investors Service at the time of the commitment of the syndicated loan, the top-level all-in margin for Tranche A was 175 bps. A 6-Month LIBOR was assumed; the average Australian dollar 6-Month LIBOR for May 2009 was 3.774%; therefore, the interest rate would be 1.75% plus 3.774%, or 5.524%. A 6-month BBSW was assumed. The average 6-month BBSW rate for May 2009 was 3.131752381% (drawn 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). therefore, the interest rate has been coded as 3.131752381% plus 1.75%, or 4.881752381%. Therefore, to estimate the interest rate for Tranche A, AidData has taken the average of the BBSW and LIBOR rates [(4.8817523815 + 5.524%) / 2], or 5.20287619075%.