ICBC contributes to $5 billion loan to Equate to refinance previous bridge loan facilities (Linked to Record ID#98956)

Project narrative

In June, 2016, the Industrial and Commercial Bank of China (ICBC) contributed an estimated $416.66 million to a $5 billion term loan facility to the Kuwait-based Equate, a joint venture (JV) between Dow Chemical and Kuwait's Petrochemical Industries Company (PIC), to refinance $6 billion bridge loan signed in 2015 (Record ID#98956). The previous loan was used by the company to acquire the Dubai-based MEGlobal for $3.2 billion as well as for refinancing and general corporate purposes. The new loan had a maturity of five (5) years and a margin rate of 200bps (2%) plus contemporary LIBOR. During negotiations, Equate managed to keep the loan's pricing relatively low due to 'strong bank market conditions'. The Conventional Offshore Facility is comprised of three tranches: (i) a U.S.$812 million three-year revolving credit facility tranche; (ii) a U.S.$1,600.5 million five-year term loan (A); and (iii) a U.S.$1,600.5 million three-year term loan (B). The lending syndicate contained at least twelve (12) known participants. HSBC, Industrial and Commercial Bank of China (ICBC), Intesa Sanpaolo, MUFG, and Sumitomo Mitsui Banking Corporation (SMBC) acted as bookrunners. Citigroup, Export Development Canada (EDC), ING Bank, JP Morgan, National Bank of Abu Dhabi (NBA), and First Abu Dhabi Bank (FAB) acted as mandated lead arrangers (MLAs). National Bank of Kuwait (NBK) acted as facility agent, but did not participate in the lending syndicate for the refinancing. MEGlobal is headquartered in Dubai and produces 1 million tons a year of ethylene glycol in Canada. As of 30 June 2016, MEGlobal Canada's and EQUATE Petrochemical B.V.'s obligations under the Conventional Offshore Facility were guaranteed, on a joint and several basis, by EQUATE, TKOC, MEGlobal B.V., EQUATE Petrochemical ULC (now amalgamated with MEGlobal Canada) and EQUATE Petrochemical B.V.