Bank of China participates in EUR 200 million syndicated pre-export finance (PxF) facility with Metalloinvest for general corporate debt refinancing purposes in September 2019

On September 18, 2019, JSC Lebedinskiy GOK — a wholly-owned subsidiary of Metalloinvest JSC — signed an EUR 200 million syndicated pre-export finance (PxF) facility agreement with seven international financial institutions: Société Générale (SGBT Finance Ireland Ltd), ING Bank N.V., Intesa Sanpaolo Bank Ireland Plc, Bank of China, UniCredit Bank, Crédit Agricole CIB, and Deutsche Bank. The loan carried a 6.5 year maturity and a competitive fixed interest rate. The borrower was expected to use the proceeds of the loan for general corporate and refinancing purposes. The loan was backed by a corporate repayment guarantee from Metalloinvest JSC.

Additional details

1. The size of the contribution from Bank of China to the EUR 200 million syndicated loan is unknown. For the time being, AidData assumes equal contributions (EUR 28,571,428) across the 7 members of the syndicate. 2. A pre-export finance (PXF) facility is 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), (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. 3. Metalloinvest JSC is the largest iron ore and hot briquetted iron (HBI) producer in Europe and CIS and the owner of one of the largest iron ore reserves in the world. Metalloinvest JSC has significant iron ore production facilities in Russia in its mining and processing plants at Lebedinsky (Lebedinsky GOK) and Mikhailovsky (Mikhailovsky GOK). The company's steel mills include the Oskol Elektrometallurgical Plant (OEMK) and Ural Steel, and a ferrous scrap unit, Ural Scrap Company.

Number of official sources

2

Number of total sources

4