Narrative
Full Description
Project narrative
In May 2016, a syndicate of 14 commercial banks — including the Bank of China (BOC), China Construction Bank Corporation (CCB), and Industrial and Commercial Bank of China (ICBC) — signed a $10.0 billion USD syndicated term loan facility agreement with the Government of Saudi Arabia. This loan carried a maturity period of five years with two one-year extension options, a final maturity date in 2021, an interest rate of LIBOR plus a margin of 105 basis points (bps), and an all-in interest rate of 120 bps. The loan was repayable in full on maturity (a grace period equal to the maturity period). The proceeds of this loan were to be used by the borrower for general budget purposes; namely, however, to fill the budget gap for the government amidst low global crude oil prices, which shrunk revenues from petrodollars. In 2015, the Government of Saudi Arabia ran a 15% budget deficit, a figure that was expected to increase for 2016 around loan signing. ICBC contributed $950 million USD to the loan syndicate. The contribution of the other banks are unknown. Record ID#72310 captures BOC's contribution. Record ID#97697 captures CCB's contribution. Record ID#97698 captures ICBC's contribution. In addition to the three Chinese state-owned banks, the following lenders contributed to the loan syndicate: the Bank of Tokyo-Mitsubishi UFJ, Ltd. (BTMU), JP Morgan Chase Bank, HSBC Bank PLC, BNP Paribas S.A., Crédit Agricole Group, Mizuho Bank, Citigroup, Deutsche Bank, Goldman Sachs, Morgan Stanley, and Sumitomo Mitsui Banking Corporation (SMBC) BTMU, JPMorgan, and HSBC served as coordinators. BOC and ICBC served as bookrunners. BNP Paribas, Crédit Agricole, and Mizuho served as mandated lead arrangers. CCB, Citigroup, Deutsche Bank, Goldman Sachs, Morgan Stanley, and SMBC served as arrangers. JPMorgan, HSBC, and BTMU each contributed around $1.3 billion USD. The loan was initially targeted at $6 billion to $8 billion USD, but was raised to $10 billion USD to meet lender interest; bankers were eager to participate in the syndicated loan in hopes it would facilitate their participation in an international bond issue planned by Saudi Arabia later in 2016. This was the Government of Saudi Arabia's first significant foreign borrowing in over a decade Then, on March 19, 2018, a syndicate of 16 banks — including BOC and ICBC — signed a $16.0 billion USD syndicated term loan facility agreement with1 the Government of Saudi Arabia. This loan was divided into two tranches: a $8.35 billion USD and an $7.65 billion USD Islamic tranche. This loan carried a maturity period of five years, a final maturity date in 2023, an interest rate of LIBOR plus a margin of 75 bps, and an all-in interest rate of LIBOR plus 84 bps. The loan was repayable in full on maturity. The proceeds of this loan were used by the borrower to refinance the 2016 $10 billion USD syndicated loan. Record ID#72312 captures BOC's contribution. Record ID#97699 captures ICBC's contribution.
Staff comments
1. The individual contribution of the 14 lenders to this $10 billion USD syndicated loan is unknown, excepting ICBC, which contributed $950 million USD, and JPMorgan, HSBC, and BTMU, which each contributed about $1.3 billion USD ($3.9 billion USD total). Thus, $5.15 billion USD remains unaccounted for amongst the 10 other lenders. For the time being, AidData has estimated the contribution of BOC and CCB by assuming that each lender contributed an equal amount ($515,000,000 USD) to the unaccounted for $5.15 billion USD figure of this syndicated loan.