Bank of China contributes to $147.5 million AUD Facility B of a $375 million AUD syndicated loan to AMA Group for share acquisitions and refinancing existing debt (Linked to Record ID#93260, #93267, and #93268)

Project narrative

On October 30, 2019, a syndicate of seven banks — including the Bank of China (BOC) — entered into a $375 million AUD syndicated facility agreement with AMA Group Limited, an Australian automobile collision repair firm, to fund its core business. This facility was secured by (i.e. collateralized against) a fixed and floating charge over all of the assets of AMA Group and its wholly owned subsidiaries. AMA Group was also required to comply with financial covenants under the terms of the facility including a net leverage ratio and a fixed cover charge ratio. In addition to BOC, the following banks participated in this syndicated loan: Australia and New Zealand Banking Group (ANZ), National Australia Bank Limited (NAB), Bendigo and Adelaide Bank Limited (ABN), First Commercial Bank Limited, Metrics Credit Partners Diversified Australian Senior Loan Fund, and Westpac Banking Corporation. Perpetual Corporate Trust Limited later joined the syndicated facility for B and D in September-October 2021. This syndicated facility was composed of four tranches: $142,500,000 AUD Facility A, which carried a maturity period of three years, a final maturity date in October 2022, and was intended to fund specific target share acquisitions, acquisition transaction costs, and the refinancing of existing debt; $147,500,000 AUD Facility B, which carried a maturity period of five years, a final maturity date in October 2024, and was intended to fund specific target share acquisitions, acquisition transaction costs, and the refinancing of existing debt; $50,000,000 AUD Facility C, which carried a maturity period of three years, a final maturity date in October 2022, and was intended to fund general corporate purposes such as permitted acquisitions, growth capital expenditure, and associated fees, costs and expenses, and, after a request by AMA Group during the pandemic, working capital advances up to a sublimit of $35,000,000 AUD; and $35,000,000 AUD Facility D, which carried a maturity period of five years, a final maturity date in October 2025, and was intended to fund working capital, general corporate purposes, bank guarantees, and letters of credit. The syndicated facility included a $50,000,000 AUD Accordion Facility, with a maturity of no earlier than October 2024 to be used for permitted acquisitions or growth capital expenditure and any associated fees, and costs and expenses. The repayment of the principal for each facility was due at the maturity date, and for working capital drawdowns there was either a clean-down obligation or a repayment schedule beginning from September 2021. As of June 30, 2020, $340 million AUD had been drawn down from the facility. $142,500,000 AUD had been drawn down from Facility A (its entire value), $147,500,000 AUD had drawn down from Facility B (its entire value), $32,500,000 AUD had been drawn down from Facility C, and $17,500,000 AUD had been drawn down from Facility D (furthermore, $12,414,000 AUD of bank guarantees had been issued under Facility D). The effective interest rate on these borrowings was 3.75%. In response to the outbreak of the COVID-19 pandemic, in 2020 AMA Group sought additional liquidity from its lenders to be able to sustain itself during the operational disruptions. The lenders responded by amending Facility C creating an option for the borrower to draw down a maximum of $35,000,000 AUD from Facility C to support working capital purposes. Furthermore, the lenders waived covenant testing until December 31, 2020, and allowed for more favorable covenant testing for the 2021 fiscal year. As of December 31, 2020, the syndicated facility decreased from $375,000,000 AUD to $305,000,000 AUD via a permanent reduction of $70,000,000 AUD of Facility B (to $72,500,000 AUD). Between June 30, 2020 and December 31, 2020, AMA Group repaid $102,500,000 AUD of its borrowings; Facility C was fully repaid, but the option to redrawn for future acquisitions and general corporate purposes remained. In September 2021, AMA Group entered into an agreement with its bank lenders to restructure the existing syndicated facility agreement. AMA Group permanently repaid Facility A. Facility C remained undrawn. $147.5 million AUD Facility B and $35 million AUD Facility D remained, with their maturities still falling in October 2024 for a total debt $182.5 million AUD. However, drawn cash under Facility D was required to not exceed $17.5 million AUD, with the rest of the money to be used for bank guarantees. Furthermore, AMA Group was subject to a $120 million AUD maximum net debt up (senior debt less cash or cash equivalents) to and including December 31, 2022. AMA Group was forbidden from making acquisitions without the prior written consent of a majority of lenders, excepting acquisitions funded entirely by scrip and from making any distributions, such as dividends, without prior written consent of a majority of lenders prior to December 31, 2022. The lenders agreed to not test the financial covenants for the March 31, 2022 testing period, with the test resuming on June 30, 2022 for an annualized basis from January 1, 2022 to June 30, 2022, then on September 30, 2022 for the 9 months previous, and afterwards on a standard last 12 month basis. The interest rates of Facility B and D were BBSY plus a 3.65% margin. The margin was based on a sliding scale with reference to Net Senior Leverage Ratio first tested in June 2022 (a maximum of 365 basis points (bps) and a minimum of 225 bps). Record ID#93260 captures BOC's contribution to $142,500,000 AUD Facility A. Record ID#93267 captures BOC's contribution to $147,500,000 AUD Facility B. Record ID#93268 captures BOC's contribution to $50,000,000 AUD Facility C. Record ID#93269 captures BOC's contribution to $35,000,000 AUD Facility D.