Narrative
Full Description
Project narrative
On December 1, 2016, financial close was reached on a deal in which a syndicate of 20 banks — including the Agricultural Bank of China (ABC), the Bank of China (BOC), the Bank of Communications (BoComm), and the Industrial and Commercial Bank of China (ICBC) — entered into $12,777,681,592 AUD ($9.85 billion USD) syndicated loan facility agreement with Ausgrid Finance Pty Ltd — a special purpose vehicle (SPV) — for the Privatization of Ausgrid. The $12,777,681,592 AUD in senior debt was divided into three main facilities: $11.931 billion AUD in acquisition facilities, a $731 million AUD capex facility with a maturity period of 3.5 years, and a $125 million AUD working capital facility with a maturity period of 3.5 years. The $11.931 billion AUD in acquisition facilities was sub-divided into five tranches. It included a $2.000 billion AUD bridge loan with a maturity period of two years, a maturity date of December 1, 2018, an initial interest rate based on BBSY plus a margin of 90 basis points (bps) from December 2016 to December 2017, then a interest rate based on BBSY plus a margin of 100 bps from December 2017 to June 2018, and then a final interest rate based on BBSY plus a margin of 11 bps from June 2018 to December 2018. It included a $1.500 billion AUD bridge loan with a maturity period of three years, a maturity date of December 1, 2019, an initial interest rate based on BBSY plus a margin of 90 bps from December 2016 to December 2017, then an interest rate based on BBSY plus a margin of 100 bps from December 2017 to June 2018, then an interest rate based on BBSY plus a margin of 110 bps from June 2018 to December 2018, then an interest rate based on BBSY plus a margin of 130 bps from December 2018 to June 2019, and a final interest rate based on BBSY plus a margin of 160 bps from June 2019 to December 2019. It included a $917 million AUD term loan with a maturity period of 3.5 years and an interest rate based on BBSY plus an estimated margin ranging from 105 to 115 bps. It included a $6.014 billion AUD term loan with a maturity period of five years, a maturity date of December 1, 2021, and an interest rate based on BBSY plus an estimated margin ranging from 135 to 145 bps. It included a $1.500 billion AUD term loan with a maturity period of seven years, a maturity date of December 1, 2023, and an interest rate based on BBSY interest rate plus an estimated margin ranging from 135 to 145 bps. The bridge loans were reportedly not syndicated in general syndication. There transaction had a debt-to-equity ratio of approximately 60:40. AustralianSuper and IFM Investors each contributed $2.47113 billion AUD ($1.82873 billion USD) in cash equity, or $4.94226 billion AUD ($3.65747 billion USD) in total, for the privatization. The proceeds were used by the borrower to facilitate the $17 billion AUD ($12.6 billion USD) acquisition of a 50.4% stake in state-owned Ausgrid by infrastructure assets manager IFM Investors and pension fund AustralianSuper under a 99-year lease, privatizing Ausgrid; the Government of New South Wales would retain a 49.6% stake in Ausgrid. Ausgrid is an electricity distribution company that owns, maintains, and operates the electrical networks supplying 1.67 million customers in Sydney, the Central Coast and Hunter regions of New South Wales, and its sale would net the State Government of New South Wales $10 billion AUD. On September 23, 2016, AustralianSuper and IFM Investors made an unsolicited bid for Ausgrid. The Government of New South Wales accepted IFM Investors and AustralianSuper's offer on October 20, 2016, with financial close on December 1, 2016. BOC originally committed $2 billion AUD to the deal, but only issued $787 million AUD after its contribution was scaled back. ABC, BoComm, and ICBC each contributed $339 million USD. Record ID#96003 captures ABC's contribution. Record ID#96004 captures BOC's contribution. Record ID#96005 captures BoComm's contribution. Record ID#96006 captures ICBC's contribution. Then, in October 2018, a syndicate of 22 lenders — including the Sydney Branch of BOC and ICBC — entered into a $6.93 billion AUD syndicated loan agreement with Ausgrid Finance Pty Ltd for the Ausgrid 2018 Refinancing Project. The loan was divided into tranches maturing in 2021 (three year maturity), 2023 (five year maturity), and 2025 (seven year maturity). The proceeds of this loan were used to refinance Ausgrid. In addition to BOC and ICBC, the following lenders contributed to the loan syndicate: Australia and New Zealand Banking Group (ANZ), Commonwealth Bank of Australia (CBA), Bank of America, BNP Paribas S.A., HSBC Australia, ING Bank Australia, Mizuho Bank, MUFG Bank, National Australia Bank Limited (NAB), Norinchukin Bank (Nochu Bank), and Westpac Banking Corporation. All these lenders served as mandated lead arrangers; ANZ and CBA also served as bookrunners. Record ID#96148 captures BOC's contribution. Record ID#96149 captures ICBC's contribution. Then, on July 2, 2019, financial close was reached on a deal in which a syndicate of at least 23 lenders — including ABC, BOC, BoComm, China Construction Bank Corporation (CCB), China Everbright Bank Co., Ltd., and ICBC — entered into a $1.650 billion AUD ($1.15240 billion USD) syndicated loan agreement with Ausgrid Finance Pty Ltd for the Ausgrid Privatization 2019 Refinancing Project. This loan was divided into two tranches: $1.400 billion AUD ($977.79 million USD) term loan tranche with a maturity period of seven years and a maturity date of July 2, 2026 and a $250.00 million AUD ($174.61 million USD) term loan tranche with a maturity period of 10 years and a maturity date of July 2, 2029. The proceeds of this loan were to be used by the borrower to refinance the acquisition of the 50.4% stake in Ausgrid by AustralianSuper and IFM Investors during its privatization. ABC contributed $52.50 million AUD ($36.67 million USD), BOC contributed $100.00 million AUD ($69.84 million USD), BoComm contributed $37.50 million AUD ($26.19 million USD), CCB contributed $100.00 million AUD, China Everbright contributed $72.50 million AUD ($50.64 million USD), and ICBC contributed $97.50 million AUD ($68.10 million USD) to the $1.4 billion AUD term loan tranche. Record ID#96007 captures ABC's contribution. Record ID#96008 captures BOC's contribution. Record ID#96009 captures BoComm's contribution. Record ID#96010 captures CCB's contribution. Record ID#96011 captures China Everbright's contribution. Record ID#96012 captures ICBC's contribution. In addition to the six Chinese state-owned banks, the following lenders contributed the respective amounts to the $1.4 billion AUD term loan tranche: MUFG Bank, Ltd. ($50.00 million AUD; $34.92 million USD), Crédit Agricole Group ($30.00 million AUD; $20.95 million USD), Norinchukin Bank (Nochu Bank) ($125.00 million AUD; $87.30 million USD), Canadian Imperial Bank of Commerce (CIBC) ($72.50 million AUD), Oversea-Chinese Banking Corporation, Limited (OCBC Bank) ($72.50 million AUD), ING Bank ($52.50 million AUD), Australia and New Zealand Banking Group (ANZ) ($40.00 million AUD; $27.94 million USD), Chang Hwa Commercial Bank ($37.50 million AUD; $26.19 million USD), Mega International Commercial Bank ($37.50 million AUD), Hua Nan Commercial Bank, Ltd. (HNCB) ($37.50 million AUD), Bank of America ($17.50 million AUD; $12.22 million USD), Sumitomo Mitsui Banking Corporation (SMBC) ($40.00 million AUD), and other lenders ($327.50 million AUD; $228.73 million USD). China Everbright contributed $15.00 million AUD ($10.48 million USD) to the $250 million AUD term loan. Record ID#96013 captures China Everbright's contribution. In addition to China Everbright Bank, the following lenders contributed to the $250 million AUD term loan tranche: Nochu Bank ($15.00 million AUD), CIBC ($15.00 million AUD), KfW-IPEX Bank GmbH ($45.00 million AUD; $31.43 million USD), and other lenders ($160.00 million AUD; $111.75 million USD). Other lenders, whose individual contributions are unknown, included Meiji Yasuda Life Insurance, Daido Life Insurance, Dai-ichi Life Insurance Company, and The Hong Kong Mortgage Corporation.