Narrative
Full Description
Project narrative
On September 29, 2009, a syndicate of some 32 banks — including the Industrial and Commercial Bank of China (ICBC) and Bank of China (BOC) — entered into a $2 billion USD forward start dual-tranche revolving credit facility agreement with Ooredoo Q.S.C. — a Qatar-incorporated telecommunications company majority-owned by entities of Government of Qatar but listed on the Qatar Stock Exchange and the Abu Dhabi Securities Exchange and based in Doha, Qatar also known as Qatar Telecom — for refinancing and general corporate purposes. The first tranche, captured by Record #98870 for ICBC and Record #98874 for BOC, was sized at $1.250 billion USD, matured on May 26, 2013 (a maturity period of 3.658 years), and had a floating interest rate of 115 basis points (bps) (1.15%) plus contemporary LIBOR. The second tranche, captured by Record #98873 for ICBC and Record #98875 for BOC, was sized at $750 million USD, matured on May 26, 2015 (a maturity period of 5.658 years) and had a floating interest rate of 145 bps (1.45%) plus contemporary LIBOR. Lenders were offered tickets of $100 million USD with fees of 65bps (0.65%) on the shorter tranche and 95 bps (0.95%) on the longer tranche, tickets of $75 million USD with fees of 55/85 bps (0.55%/0.85%), tickets of $50 million with fees of 45/75 bps (0.45%/0.75%), and tickets of $25 million USD with fees of 35/65 bps (0.35%/0.65%). The lending syndicate included an estimated 32 banks, each joining in either the senior or final phase of syndication. Senior phase banks included BNP Paribas, DBS Bank, Qatar National Bank (QNB), Royal Bank of Scotland (RBS), and Societe Generale as bookrunners. MUFG Bank (formerly Bank of Tokyo-Mitsubishi UFJ), Barclays, Citibank, Deutsche Bank, HSBC, Samba Financial Group, Sumitomo Mitsui Banking Corporation (SMBC), Standard Chartered Bank, and WestLB acted as initial mandated lead arrangers (MLAs). Industrial and Commercial Bank of China (ICBC) is presumed to have participated in this phase, but its role is currently unknown (see staff comments). Final phase banks included Ahli United Bank, ANZ Bank, BofA Securities, Inc. (formerly Bank of America Merrill Lynch (BAML)), Bank of China (BOC), Bank of Kaohsiung (BOK), Chang Hwa Commercial Bank, The Commercial Bank of Qatar (P.S.Q.C.) (CBQ) (The Commercial Bank), Credit Agricole, Export Development Canada (EDC), Fortis Bank Nederland (now part of ABN AMRO), Goldman Sachs, Housing Bank, International Bank of Qatar (IBQ), JPMorgan, Malayan Banking Berhad (Maybank), Natixis, and the State Bank of India (SBI). Part of this loan facility was intended to refinance a previous $2 billion USD facility from 2007 (Bank of China (Hong Kong) contributed to that loan, capture by Record ID#98855) following a forward start model. The loan originally had a high margin at 250 bps (2.5%), but this number was presumably lowered to the reported 115/145 bps (1.15%/1.45%) rate at some point before being finalized. The loan was fully disbursed on May 26, 2010. Ooredoo originally sought to borrow $1.5 billion. However, higher than expected demand from lenders led to oversubscription up to $3.86 billion USD, scaled down to a final $2 billion USD.
Staff comments
1. Industrial and Commercial Bank of China's (ICBC) participation in the syndicated loan is not confirmed. ICBC-affiliated sources describe the bank as either directly participating or providing an "issued letter of intent" to Ooredoo pledging participation in a "1 billion US dollars loan". However, later sources listing participating banks, which include mentions of the Bank of China (BOC), omit ICBC. The issue warrants further investigation. 2. Industrial and Commercial Bank of China (ICBC) affiliated-sources report the bank as joining the lending syndicate in September, 2009. As the final phase of syndication is currently assumed to have occurred in 2010, ICBC is currently assumed to be a part of the senior phase of the lending syndicate. 3. Industrial and Commercial Bank of China's (ICBC) reportedly joined the loan syndicate during the senior syndication phase, in which a further 14 banks participated, contributing $89 million in total. The contribution of the senior phase banks was derived by subtracting the known contribution of the final phase of syndication ($1.11 billion) from the known loan total ($2 billion). ICBC's contribution to the loan ($59.33 million) was estimated by dividing this derived number ($890 million) by the number of banks that joined during senior phase of syndication (15). Then, this number was split 62.5% and 37.5%, totaling $37 million and $22.25 million respectively, to estimate ICBC's contribution to each of the loan's two tranches. In addition, ICBC would have received a participation fees estimated at 45bps (0.45%) on the shorter tranche and 75bps (0.75%) on the longer tranche. 4. Bank of China's (BOC) contribution ($65.29 million) was estimated by dividing the known overall contribution of the banks joining the loan in the final phase of syndication ($1.11 billion), of which BOC was a part, by the total number of banks joining in the final phase of syndication (17). Then, this number was split 62.5% and 37.5%, totaling $40.8 million and $24.26 million respectively, to estimate BOC's contribution to each of the loan's two tranches. In addition, BOC would have received a participation fees estimated at 45bps (0.45%) on the shorter tranche and 75bps (0.75%) on the longer tranche. 5. A forward start facility is a syndicated loan used to refinance an existing syndicated loan upon that loan's maturity.