China Construction Bank participates in $600 million syndicated pre-export finance (PxF) facility with Metalloinvest for general corporate and refinancing purposes in July 2015 (linked to project ID#95838 and 95840),

On July 15, 2015, two wholly owned subsidiaries of Metalloinvest — JSC Lebedinskiy GOK and JSC OEMK — signed a $750 million syndicated pre-export finance (PxF) facility agreement. The PxF facility (loan) includes two tranches: a $600 million tranche that carries a 5-year maturity and a 2-year grace period, and a $150 million tranche that carries a 7-year maturity and a 5-year grace period (see project ID#95846, 95848, and 95849). Both tranches carried floating interest rates linked to LIBOR and were to be redeemed in equal monthly installments. The facility is secured by (i.e. collateralized against) the borrowers' export revenues in favor of Metalloinvest Trading AG and is guaranteed by JSC Holding Company Metalloinvest. The borrower was expected to use the proceeds of the loan to repay part of the PxF facility raised in March 2014 and due in April-December 2016, as well as to secure additional liquidity for the redemption of eurobonds due in July 2016. The following banks participated in the syndicated: Bank of China (Hungary) Close Ltd., ING Bank N.V., Sberbank Europe AG, Société Générale, and UniCredit Bank Austria AG participated as Coordinators and Bookrunners; Deutsche Bank AG, Amsterdam Branch, Intesa Sanpaolo Bank Ireland Plc, and JSC Nordea Bank participated as Senior Mandated Lead Arrangers; Bank of America Merrill Lynch International Limited, China Construction Bank (Russia) Limited, Credit Suisse AG, SGBT Finance Ireland Limited, and ZAO Industrial and Commercial Bank of China (Moscow) participated as Mandated Lead Arrangers.

Additional details

1. The size of the contributions from Bank of China, ICBC, and China Construction Bank to the $600 million syndicated loan tranche unknown. For the time being, AidData assumes equal contributions ($46,153,846) across the 13 known members of the syndicate. 2. A pre-export finance (PXF) facility 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 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 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. 4. See project ID#95838 for Bank of China's contribution to this loan and project ID#95840 for Industrial and Commercial Bank of China's contribution.

Number of official sources

2

Number of total sources

6