ICBC contributes to a $400 million syndicated corporate loan facility to Equinox Minerals Limited

Project narrative

On February 1, 2010 (later signed on March 9, 2010), it was announced that Standard Bank Plc, Standard Chartered Bank, Industrial and Commercial Bank of China, and BNP Paribas would participate in a corporate loan facility to Equinox Minerals Limited. The key elements of the Corporate Facility are a 3-year US$220 million term loan with quarterly principal and an interest rate of 4% and a 5-year (with an optional one-year extension) US$180 million revolving facility with an interest rate of 4.75% for the first two years then 4% for the remaining time in which the Company is allowed full repayment and/or full redraw of, up to the facility limit, over the term. The sponsor has the option to extend the term loan and revolver by $80 million and $100 million respectively. The deal smoothed the principal debt repayments more evenly over the life of the loans without changing the tenor of the various facilities. However, Equinox had to pay an additional 50bp margin from 1 April 2009 on the outstanding senior debt facilities. The refi sees the Lumwana Mining Company's (LMC) parent company, Equinox Minerals, and its subsidiary, refinance US$400 million in senior and subordinated project finance debt. Equinox and LMC can also request an increase of up to $200m in the amount available, subject to the consent of the banks. The Corporate Facility will be used to repay certain existing senior and subordinated project loan facilities provided to the Company's wholly owned subsidiary Lumwana Mining Company ("LMC") in 2006 for the $814 million Lumwana copper project in Zambia. The parties said the terms "represent a much more traditional refinancing structure, as against other more novel structures that have been used recently to refinance debt, and is an indication of liquidity returning to the banking market." Equinox and LMC were advised by Norton Rose in the deal, while Clifford Chance advised the lender group.