Narrative
Full Description
Project narrative
On March 20, 2014, a syndicate of 19 banks and five export credit agencies (ECAs)— including the Bank of China (BOC), China Construction Bank Corporation (CCB), and the Industrial and Commercial Bank of China (ICBC) — entered into a $7.67320 billion USD ($8.28115 billion AUD) syndicated facility agreement with Roy Hill Holdings Pty Ltd (RHH) — a special purpose vehicle (SPV) and a joint venture of Australia's Hancock Prospecting (whose majority shareholder is Australian billionaire Gina Rinehart) (70% equity stake), Japan's Marubeni Corporation (15% equity stake), South Korea's POSCO (12.5% equity stake), and Taiwan's China Steel Corporation (CSC) (2.5% equity stake) — for the Roy Hill Iron Ore Project. Financial close was reached on April 22, 2014. 19 commercial lenders participated in this loan syndicate; in addition to BOC, CCB, and ICBC, the following banks contributed to this facility: Australia and New Zealand Banking Group (ANZ), BNP Paribas S.A., Bank of Tokyo-Mitsubishi UFJ, Ltd. (BTMU), Commonwealth Bank of Australia (CBA), HSBC Bank PLC, ING Group N.V., Korea Finance Corporation (KoFC), Mizuho Bank, National Australia Bank Limited (NAB), Oversea-Chinese Banking Corporation, Limited (OCBC Bank), Sumitomo Mitsui Banking Corporation (SMBC), Société Générale S.A. (SocGen), Westpac Banking Corporation, Caterpillar Financial Services, Natixis, and Sumitomo Mitsui Trust Bank, Limited (SMTB). Five ECAs participated, via direct loans, guarantees, or insurance: the Export-Import Bank of Korea (KEXIM), Nippon Export and Investment Insurance (NEXI), Korea Trade Insurance Corporation (K-Sure), the Export-Import Bank of the United States, and the Japan Bank for International Cooperation (JBIC). BOC, ICBC, ANZ, BNP Paribas, BTMU, CBA, HSBC, KoFC, Mizuho, NAB, OCBC Bank, SMBC, SocGen, and Westpac served as mandated lead arrangers. CCB, Caterpillar Financial, Natixis and Sumitomo Mitsui Trust served as lead arrangers. The $7.67320 billion USD of debt was divided into several tranches: - a $2.505 billion USD ($2,703.47 billion AUD) term loan tranche with a maturity period of ten years and six months (10.5 years), a final maturity date of November 1, 2024, and rumored interest rate based on a floating rate based a margin of around 300 basis points (bps) provided by all 19 commercial lenders, including ICBC, BOC, and CCB; - a RMB 60 million tranche with a maturity period with a maturity period of ten years and six months (10.5 years) and a final maturity date of November 1, 2024 provided by ICBC and BOC meant to pay for the acquisition of equipment from China; - a $450 million USD ($485.65 million AUD) tranche a maturity period with a maturity period of ten years and six months (10.5 years) and a final maturity date of November 1, 2024 provided by 14 commercial lenders, including ICBC, and guaranteed by KEXIM; - a $700 million USD ($755.46 million AUD) tranche a maturity period with a maturity period of ten years and six months (10.5 years) and a final maturity date of November 1, 2024 provided by 11 commercial lenders and guaranteed by NEXI; - a $1.2 billion USD ($1.29508 billion AUD) tranche a maturity period with a maturity period of ten years and six months (10.5 years) and a final maturity date of November 1, 2024 provided by 14 commercial lenders, including ICBC, and guaranteed by K-Sure; - a $200 million USD ($215.85 million AUD) FX Option Premium Facility tranche a maturity period with a maturity period of ten years and six months (10.5 years) and a final maturity date of November 1, 2024 provided by 13 commercial lenders, including ICBC; - a $300 million AUD working capital tranche a maturity period with a maturity period of ten years and six months (10.5 years) and a final maturity date of November 1, 2024 provided by six commercial lenders, including BOC; - a $200 million USD ($215.85 million AUD) letter of credit tranche a maturity period with a maturity period of ten years and six months (10.5 years) and a final maturity date of November 1, 2024 provided by six commercial lenders, including BOC; - a $2.085 billion USD ($2.25019 billion AUD) export credit facility tranche a maturity period with a maturity period of ten years and six months (10.5 years) and a final maturity date of November 1, 2024 provided by KEXIM, JBIC, and the U.S. Export-Import Bank. BOC contributed $160.95 million USD ($173.70 million AUD), CCB contributed $40.00 million USD ($43.17 million AUD), and ICBC contributed $155.00 million USD ($167.28 million AUD) to the $2.505 billion USD tranche. The other lenders contributed as follows: The other lenders contributed as follows: NAB ($229.05 million USD; $247.20 million AUD), BNP Paribas ($200.00 million USD; $215.85 million AUD), CBA ($200.00 million USD), Westpac ($120.00 million USD; $129.51 million AUD), ANZ ($200.00 million USD), MUFG Bank ($200.00 million USD), SMBC ($200.00 million USD), Mizuho ($200.00 million USD), HSBC Bank ($100.00 million USD; $107.92 million AUD), ING Group N.V. ($100.00 million USD), KoFC ($80.00 million USD; $86.34 million AUD), OCBC Bank ($100.00 million USD), SocGen ($100.00 million USD), Caterpillar Financial ($40.00 million USD), Natixis ($40.00 million USD), and SMTB ($40.00 million USD). Record ID#94847 captures BOC's $160.95 million USD contribution to the $2.505 billion USD tranche. Record ID#94848 captures CCB's $40 million USD contribution to the $2.505 billion USD tranche. Record ID#94849 captures ICBC's $155 million USD contribution to the $2.505 billion USD tranche. BOC contributed RMB 35 million and ICBC contributed RMB 25 million to the RMB 60 million term loan tranche. Record ID#94850 captures BOC's RMB 35 million contribution to the RMB 60 million term loan tranche. Record ID#94851 captures ICBC's RMB 25 million contribution to the RMB 60 million term loan tranche. ICBC contributed $23.00 million USD ($24.82 million AUD) to the KEXIM-covered $450 million USD tranche. The other lenders contributed as follows: NAB ($45.00 million USD; $48.57 million AUD), BNP Paribas ($45.00 million USD), CBA ($45.00 million USD), Westpac ($23.00 million USD), ANZ ($45.00 million USD), MUFG Bank ($45.00 million USD), SMBC ($45.00 million USD), Mizuho ($45.00 million USD), HSBC Bank ($23.00 million USD), ING Group N.V. ($23.00 million USD), SocGen ($23.00 million USD), Natixis ($10.00 million USD; $10.79 million AUD), and SMTB ($10.00 million USD). Record ID#94852 captures ICBC's $23 million USD contribution to the $450 million USD term loan tranche. No Chinese lender contributed to the NEXI-covered $700 million USD tranche. The contributions of this tranche are as follows: NAB ($80.00 million USD; $86.34 million AUD), BNP Paribas ($80.00 million USD), CBA ($80.00 million USD), ANZ ($80.00 million USD), MUFG Bank ($80.00 million USD), SMBC ($80.00 million USD), Mizuho ($80.00 million USD), HSBC Bank ($35.00 million USD; $37.77 million AUD), ING Group N.V. ($35.00 million USD), SocGen ($35.00 million USD), and SMTB ($35.00 million USD). ICBC contributed $42.00 million USD ($45.33 million AUD) to the K-Sure-covered $1.2 billion USD tranche. The other lenders contributed as follows: NAB ($258.00 million USD; $278.44 million AUD), BNP Paribas ($100.00 million USD), CBA ($100.00 million USD), Westpac ($60.00 million USD; $64.75 million AUD), ANZ ($120.00 million USD; $129.51 million AUD), MUFG Bank ($50.00 million USD; $53.96 million AUD), SMBC ($100.00 million USD), Mizuho ($100.00 million USD), HSBC Bank ($60.00 million USD;), ING Group N.V. ($60.00 million USD), SocGen ($60.00 million USD), Natixis ($30.00 million USD; $32.38 million AUD), and SMTB ($60.00 million USD). Record ID#94853 captures ICBC's $42 million USD contribution to the $1.2 billion USD term loan tranche. ICBC contributed $15.90 million USD ($17.16 million AUD) to the $200 million USD FX Option Premium Facility tranche. The other lenders contributed as follows: NAB ($23.50 million USD; $25.36 million AUD), BNP Paribas ($20.60 million USD; $22.23 million AUD), CBA ($20.60 million USD), Westpac ($12.30 million USD; $13.27 million AUD), ANZ ($20.60 million USD), SMBC ($100.00 million USD), Mizuho ($20.60 million USD), HSBC Bank ($10.30 million USD; $11.12 million AUD), ING Group N.V. ($10.30 million USD), SocGen ($10.30 million USD), OCBC Bank ($10.30 million USD), and Natixis ($4.10 million USD; $4.42 million AUD). Record ID#94854 captures ICBC's $15.90 million USD contribution to the $200 million USD FX Option Premium Facility tranche. BOC contributed $34.40 million AUD ($31.87 million USD) to the $300 million AUD working capital tranche. The other lenders contributed as follows: NAB ($49.14 million AUD; $45.53 million USD), ANZ ($73.71 million AUD; $68.30 million USD), CBA ($68.80 million AUD; $63.75 million USD), BNP Paribas ($19.66 million AUD; $18.21 million USD;), and Westpac ($49.14 million AUD). Record ID#94855 captures BOC's $34.40 million AUD contribution to the $300 million AUD working capital tranche. BOC contributed $30.00 million USD ($32.38 million AUD) to the $200 million USD letter of credit tranche. The other lenders contributed as follows: NAB ($40.00 million USD), CBA ($45.00 million USD; $48.57 million AUD), BNP Paribas ($40.00 million USD), Westpac ($25.00 million USD; $26.98 million AUD), and HSBC Bank PLC ($20.00 million USD; $21.58 million AUD). No Chinese lenders contributed to the $2.085 billion USD ECA direct loan tranche. KEXIM provided $592.50 million USD ($639.44 million AUD), JBIC provided $900.00 million AUD ($971.31 million USD), and the U.S. Export-Import Bank provided $592.50 million USD. The debt did not received a completion guarantee from Hancock Prospecting. Additionally, the sponsors of the project provided $3 billion USD ($3.23769 billion AUD) in equity, divided as follows: Hancock Prospecting ($2.1 billion USD; $2.26638 billion AUD), Marubeni ($450 million USD; $485.65 million AUD), POSCO ($375 million USD; $404.71 million AUD), and CSC ($75 million USD; $80.94 million AUD). A total of $10.6732 billion USD ($11.51884 billion AUD) was used for the Roy Hill Iron Ore Project. In addition to sponsoring the project, Marubeni, POSCO, and CSC were off-takers for approximately 50% of the Roy Hill project's product. The proceeds of this debt was to be used by the borrower for the development of the Roy Hill Iron Ore Project, which involved the construction of a integrated open pit iron ore mine with a capacity of 55 million ton per annum (mpta) and a wet high-intensity magnetic separation plant (WHIMS) (iron ore processing plant) located in the Chichester Range 115 kilometers north of Newman, Western Australia, a wet high-intensity magnetic separation plant (WHIMS) (iron ore processing plant), a small airport, the Ginbata Airport, capable of accommodating Boeing 737 aircraft, worker villages at Roy Hill and Port Hedland capable of housing 3,600 construction workers and 2,000 operational staff, 344 kilometers (210 miles) of heavy-haul railway with GE ES44ACI locomotives and 232 wagons, two dedicated deep-water berths and associated handling infrastructure at Port Hedland to export products, in the Pilbara region of Western Australia. The Roy Hill mine has indicated and inferred reserves of over 2.4 billion tons. The mine had a project life of over 20 years, estimated at an average strip ratio of 4:1 and via open-pit, drill-and-blast, and truck-and-excavator mining. This was the world’s largest project financing for the development of a greenfield mining project to that point. Construction began in 2011 and the project was scheduled to begin shipping iron ore by 2015. The first ore was mined in April 2014 and the first ore was shipped in December 2015. Then, on March 26, 2020, a syndicate of 17 banks — including BOC, CCB, and ICBC — entered into a $2 billion USD syndicated revolving loan agreement with RHH for the Roy Hill Iron Ore 2020 Refinancing Project. This loan carried a maturity period of four years. The proceeds of this loan were to be used by the borrower for the refinancing of the Roy Hill Iron Ore Mine located in the Chichester Region in Western Australia. BOC contributed $170 million USD, CCB contributed $100 million USD, and ICBC contributed $70 million USD to the loan syndicate. In addition to the three Chinese banks, the following lenders contributed the respective amounts to the syndicated loan: SMBC ($100 million USD), ANZ ($170 million USD), BNP Paribas ($170 million USD), CBA ($170 million USD), ING Bank N.V. ($100 million USD), Mizuho Bank ($170 million USD), MUFG Bank, Ltd. ($100 million USD), NAB ($170 million USD), Natixis ($100 million USD), OCBC Bank ($50 million USD), SocGen ($70 million USD), SMTB ($20 million USD), HSBC ($100 million USD), and Westpac ($170 million USD). Record ID#94859 captures BOC's $170 million USD contribution. Record ID#94860 captures CCB's $100 million USD contribution. Record ID#94861 captures ICBC's $70 million USD contribution.