Narrative
Full Description
Project narrative
On November 21, 2017, a syndicate of banks — including the London Branch of the Bank of China (BOC) — entered into a $2.4 billion USD senior secured reserves-based revolving credit facility (RCF) with Tullow Oil plc — an England and Wales-incorporated multinational oil and gas exploration company — for the Tullow Oil 2017 Refinancing Project. The proceeds were to be used by the borrower to meet liabilities in relation to any letter of credit in which respect of which demands have been made, to fund Tullow's capital expenditure program approved by the global technical banks, for general corporate purposes (including acquisitions), and, for any letter of credit issued under it, towards providing security, credit enhancement, or financial assurance for the performance of Tullow's exploration, development, production obligations, or any of its obligations under any production sharing, joint operating, or similar agreement. This loan refinanced previous debt accrued by Tullow. Tullow Equatorial Guinea Limited (Tullow EG) was one of the borrowers and a guarantor under this loan. This loan carried a maturity period of seven years and a final maturity date of the earlier of November 21, 2024 or the later of March 31 or September 30 immediately preceding the first date on which the aggregate commercial reserves for all relevant borrowing base assets to which the facility was referable were project to be 20% or less of the aggregate initial reserves for all borrowing base assets. Commitments under the RCF amortized according to a pre-agreed schedule of amortization, scheduled for April 1 and October 1 before the final maturity date. The RCF carried an interest rate equal to the aggregate of the margin plus LIBOR (for loans denominated in U.S. dollars or British pounds sterling) or EURIBOR (for loans denominated in euros), with the margin varying based on the ratio of consolidated total net borrowings to consolidated earnings before interest, taxes, depreciation and amortization (EBITDA) on the date that the loan is outstanding; there was a default interest rate of 2% per annum higher than the standard rate of interest payable on loans for overdue amounts. This loan was secured by (i.e. collateralized against) by English law share charges, English law debentures, English law account charges, an English law assignment of intragroup loan receivables, Gabonese law share pledges, Isle of Man law share charges, Jersey law security interest agreements, certain Dutch law security agreements and certain French law bank account pledge agreements. The borrowing base amounts for this loan (known as a net present value facility) were based on the expected present value of future cash flows from producing assets, taking into account Tullow's reserves, production, capital, and operating expenditure. The borrowing base for this facility included assets in Ghana (Tullow's interests in the Jubilee field and the TEN fields), Gabon (including Tullow's interests in the Tchatamba fields, Simba field, Niungo field, Echira field, Ezanga field and Tullow’s interest in the fields which form the subject of the Ruche Exclusive Exploitation Authorisation, namely Tortue, Ruche and Ruche North East fields), Equatorial Guinea (Tullow's interests in the Ceiba field and Okume Complex fields) and Côte d’Ivoire (Tullow’s interests in the Espoir field); the borrowing base amount is re-determined every six months at the end of March and September. There was a commitment fee due quarterly in arrears based (1) on the daily amount if any by which the aggregate commitments under the facility exceed the amount which was lower of the sum of the applicable borrowing base amount applicable on that day and $350 million USD or the global commitments applicable on that day at a percentage rate per annum calculated by multiplying the then applicable margin by a set rate and (2) the daily amount, if any, by which the applicable maximum available amount exceeds the sum of the outstanding loans under the facility at a percentage rate per annum calculated by multiplying the then applicable margin by a set rate. Additionally, when a borrower requested a letter of credit under the facility was required to a pay a commission quarterly in arrears based on (1) the daily amount, if any, by which the exposure under each letter of credit exceeding the amount of approved cash covered provided for it at a percentage rate per annum calculated by multiplying the then applicable margin by a set number and (2) the daily amount of letter of credit exposure under each letter of credit in respect of which approved cash cover has been provided at a set rate per annum. The facility contained provisions for the occurrence of events of default including if any subsidiary holding an interest in borrowing base assets or obligor ceased to be a wholly owned part of Tullow Oil, the nationalization or expropriation (or an announcement of intent to do so) of any part of any borrowing base asset or any oil or gas or revenues derived from that would lead to a material adverse change, abandonment of any borrowing base asset that contributes in excess of $100 million USD to the then applicable net present value, and the making of any judgement or award in litigation, arbitration or administrative proceedings against an obligor or other key subsidiary which, after deducting amounts receivable under insurances, equals or exceeds $300 million USD. Prepayment would be required in fully immediately if there was a change of control of Tullow. Additionally, financial covenants required Tullow to comply with ratios for its Covenanted Net Debt to Consolidated EBITDA. Additionally, on the same day, Tullow Oil entered into a legally separate — but signed with and related to the $2.4 billion USD facility, framed as a combined $2.5 billion USD facility — $100 million USD bilateral senior secured RCF with the International Finance Corporation (IFC), which served as the sole lender and agent. This facility was fully repaid and terminated on October 31, 2019. The refinancing was completed on November 29, 2017. On March 24, 2020, Tullow Oil issued a voluntary cancellation request for funds under the RCF; by March 31, 2020, $210 million USD of commitments were cancelled, reducing the face value of the RCF to $2.19 billion USD. Then, on May 29, 2020, Tullow Oil issued another voluntary cancellation request; by June 8, 2020, another $210 million USD of commitments were cancelled, reducing the face value of the RCF to $1.98 billion USD. As of the second quarter of 2020, $1.5 billion USD had been drawn down under the facility BOC contributed $77.00 million USD to the loan syndicate. In addition to BOC, the following lenders contributed the respective amounts to the loan: Crédit Agricole Group ($175.00 million USD), DNB NOR Bank ($175.00 million USD), Lloyds Bank ($175.00 million USD), ING Bank N.V. ($175.00 million USD), BNP Paribas S.A. ($170.00 million USD), Deutsche Bank ($133.00 million USD), Barclays Bank ($191.40 million USD), Sumitomo Mitsui Banking Corporation (SMBC) ($133.00 million USD), Société Générale S.A. (SocGen) ($133.00 million USD), Standard Chartered Bank ($133.00 million USD), JPMorgan Chase Bank N.A. ($133.00 million USD), Natixis ($125.00 million USD), Standard Bank ($175.00 million USD), ABN AMRO Bank N.V. ($100.00 million USD), Natixis ($50.00 million USD), the Bank of Tokyo-Mitsubishi UFJ, Ltd. (BTMU) ($50.00 million USD), Nedbank Group ($50.00 million USD), and Absa Bank Limited ($46.60 million USD). Specific lenders included the following: the London Branch of BOC, ING Belgium SA/NV, DNB (UK) Limited, Lloyds Bank plc, Natixis, Natixis (London Branch), Credit Agricole Corporate and Investment Bank (CACIB), the Standard Bank of South Africa Limited, the Standard Bank of South Africa Limited (Isle of Man Branch), BNP Paribas, JP Morgan Chase Bank N.A (London Branch), Barclays Bank PLC, Deutsche Bank AG (Amsterdam Branch), Standard Chartered Bank, Société Générale, Sumitomo Mitsui Banking Corporation Europe Limited, ABSA Bank Limited, Barclays Bank of Ghana Limited, ABN AMRO Bank NV, Barclays Bank Mauritius Limited, Nedbank Limited, The Bank of Tokyo-Mitsubishi UFG, Ltd, DNB Bank ASA, DNB Bank ASA (London Branch), and ING Belgium SA/NV. On August 11, 2020, JP Morgan Chase Bank (London Branch) transferred $25,000,000 USD of its commitment to Bank of America, N.A. (London Branch); on December 16, 2020 ABN AMRO Bank transferred $41,250,000 USD to Deutsche Bank AG, London Branch. ING Belgium SA/NV, DNB (UK) Limited, Lloyds Bank plc, Natixis, Natixis (London Branch), CACIB, the Standard Bank of South Africa Limited, the Standard Bank of South Africa Limited (Isle of Man Branch), BNP Paribas, JP Morgan Chase Bank N.A (London Branch), Barclays Bank PLC, Deutsche Bank AG (Amsterdam Branch), Standard Chartered Bank, SocGen, and Sumitomo Mitsui Banking Corporation Europe Limited served as mandated lead arrangers. BOC London Branch, ABSA Bank Limited, Barclays Bank of Ghana Limited, ABN AMRO Bank NV, Barclays Bank Mauritius Limited served as lead arrangers, Nedbank Limited (London Branch) and The Bank of Tokyo-Mitsubishi UFG, Ltd served as arrangers. Lloyds Bank plc served as global modelling bank, global technical bank and co-ordinating technical bank. Natixis served as agent and global senior agent. BNP Paribas served as security trustee. BNP Paribas, CACIB, ING Belgium SA/NV, DNB Bank ASA, and the Standard Bank of South Africa served as as global technical banks. ING Belgium SA/NV and DNB (UK) Limited served as documentation banks. DNB Bank ASA (London Branch), ING Belgium SA/NV, Natixis, and CACIB served as as fronting banks.