Bank of China pledges $244.8 million loan for 45 Freight Electric Locomotives Acquisition Project

On December 25. 2015, Bank of China submitted a Sinosure (loan) facility proposal to JSC "Georgian Railway" — a Georgian state-owned enterprise — for the 45 Freight Electric Locomotives Acquisition Project. It identified the following borrowing terms and conditions: a $244,800,000 buyer’s credit loan with an interest rate of no more than 6%, a maturity of 10-15 years, a 2% penalty (default) interest rate, a 1.1% arrangement (management fee), a 1.1% commitment fee, a 5.75% to 6.74% insurance premium, and a $30,000 per annum agency fee. The loan would require a Sinosure insurance policy. It would also require collateral in the form of a lien on a ready-made set of electric locomotives. If the borrower accepted the proposal, it would be authorized to use the loan proceeds to finance 85% of the cost of a $300 million commercial contract with CSR Zhuzhou Electric Locomotive Co., Ltd.. It would also be responsible for servicing the loan in equal semiannual repayments. The indicative financing proposal was only valid until March 25, 2016.

Additional details

1. The Sinosure (loan) facility proposal can be accessed in its entirety via https://www.dropbox.com/s/7sdkvw86n1eiixc/Bank%20of%20China%20Term%20Sheet%20for%2045%20Units%20of%20Freight%20Electric%20Locomotive%20Project.pdf?dl=0. 2. The prospective lender offered the prospective borrower the option of borrowing with a maturity as short as 10 years or as long as 15 years. AidData has coded the maturity field as the midpoint (12.5 years) of this range.

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