China Construction Bank contributes $151.24 million AUD to the $2.571 billion AUD revolver tranche of a $5.927 billion AUD syndicated loan for the Privatization of Endeavour Energy (Linked to Record ID#95906 and #95907)

Project narrative

On June 14, 2017, financial close was reached on a deal in which a syndicate of 17 banks — including the Sydney Branch of the Bank of China (BOC), the Sydney Branch of the Bank of Communications Co., Ltd. (BoComm), and the Sydney Branch of China Construction Bank Corporation (CCB) — entered into a $5.927 billion AUD ($4.47054 billion USD) syndicated loan agreement with Network Finance Company Pty Limited — a special purpose vehicle (SPV) and finance vehicle of the Advance Energy group jointly owned by Macquarie Infrastructure and Real Assets (30.16%), AMP Capital Investors Limited (25%), British Columbia Investment Management Corporation (25%), and Qatar Investment Authority (QIA) (19.85%) — for the Privatization of Australian energy utility Endeavour Energy. The $7.62441 billion AUD ($5.75084 billion USD) privatization was financed by the $5.927 billion AUD syndicated loan and $1.69741 billion AUD ($1.2803 billion USD) in equity. This $5.927 billion AUD syndicated loan was divided into five tranches: a $1.600 billion AUD ($1.20683 billion USD) bridge facilities tranche with a maturity period of three years and a maturity date of June 30, 2020; a $1.285 billion AUD ($969.23 million USD) term loan tranche with a maturity period of three years and six months (3.5 years), a maturity date of December 14, 2020, a repayment period of June 2017 to December 2020 (grace period of zero years), an interest rate of BBSY plus 90 basis points (bps); a $2.571 billion AUD ($1.93922 billion USD) revolver tranche with a maturity period of five years, a maturity date of June 30, 2022, a repayment period from June 2017 to June 2022 (grace period of zero years), and an interest rate of BBSY plus a margin of 115 bps; $406 million AUD ($306.23 million USD) term loan tranche with a maturity period of three years and six months (3.5 years), a maturity date of December 14, 2020 a repayment period of June 2017 to December 2020 (grace period of zero years), and an interest rate of BBSY plus a margin of 90 bps; and a $65 million AUD ($49.03 million USD) working capital tranche with a maturity period of three years and six months (3.5 years), a maturity period of December 14, 2020, a repayment period of June 2017 to December 2020 (grace period of zero years), and an interest rate of BBSY plus a margin of 90 bps. The loan was secured by (i.e. collateralized against) a general security agreement, a special security agreement, a mortgage of Network lease, a cross guarantee, and a Tripartite Deed. All 17 lenders, including BOC, BoComm, and CCB contributed $94.12 million AUD ($70.99 million USD), to the $1.6 billion AUD bridge facilities tranche. Record ID#95900 captures BOC's contribution. Record ID#95901 captures BoComm's contribution. Record ID#95902 captures CCB's contribution. All 17 lenders, including BOC, BoComm, and CCB contributed $75.59 million AUD ($57.01 million USD), to the $1.285 billion AUD term loan tranche. Record ID#95903 captures BOC's contribution. Record ID#95904 captures BoComm's contribution. Record ID#95905 captures CCB's contribution. All 17 lenders, including BOC, BoComm, and CCB contributed $151.24 million AUD ($114.07 million USD), to the $2.571 billion AUD revolver tranche. Record ID#95906 captures BOC's contribution. Record ID#95907 captures BoComm's contribution. Record ID#95908 captures CCB's contribution. All 17 lenders, including BOC, BoComm, and CCB contributed $23.88 million AUD ($18.01 million USD), to the $406 million AUD term loan tranche. Record ID#95909 captures BOC's contribution. Record ID#95910 captures BoComm's contribution. Record ID#95911 captures CCB's contribution. In addition to BOC, BoComm, and CCB, the following lenders contributed to the $5.927 billion AUD syndicated loan: Australia and New Zealand Banking Group Limited (ANZ), the Australian Branch of Bank of America N.A., the Bank of Tokyo-Mitsubishi UFJ, Ltd (BTMU), Credit Agricole CIB Australia Limited, Canadian Imperial Bank of Commerce (CIBC), Commonwealth Bank of Australia (CBA), Export Development Canada (EDC), the Sydney Branch of the Hong Kong and Shanghai Banking Corporation Limited (HSBC), the Sydney Branch of Mizuho Bank Ltd, the Hong Kong Branch of Natixis, the Norinchukin Bank (Nochu Bank), the Australia Branch of the Bank of Nova Scotia (Scotiabank), Sumitomo Mitsui Banking Corporation (SMBC), the Hong Kong Branch of Société Générale S.A (SocGen), and Westpac Banking Corporation. CCB served as a mandated lead arranger. The proceeds of this loan were to be used by the borrower for the privatization of Australian energy Endeavour Energy; specifically, the proceeds would used to fund the consideration for the lease premium under the lease and purchase price under the sale and purchase agreement and associated transaction costs, to fund capital expenditures, and to fund working capital. The Advance Energy consortium had purchased an 50.4% stake in New South Wales-based Endeavor Energy and would take over the management of Endeavour Energy, a supplier of energy across Sydney, the Blue Mountains, the Southern Highlands, Illawarra, and the South Coast under a 99-year lease; the Government of New South Wales held the remaining 49.6% stake in Endeavour Energy. The Government of New South Wales intended to use the proceeds of the sale and the $2.2 billion AUD in incentive payments from the Australian Federal Governments to finance new schools, roads, and hospitals. The sale was announced on May 11, 2017.