Overview

ICBC Financial Leasing signs $544 million sale-and-leaseback financing agreement with Frontline for the acquisition of ten suezmax vessels

Commitments (Constant USD, 2023)$564,665,195

Commitment Year•2019Country of Activity•BermudaDirect Recipient Country of Incorporation•BermudaSector•Transport And StorageFlow Type•Loan

Status

Project lifecycle

Completion

Pipeline: PledgePipeline: CommitmentImplementationCompletion

Timeline

Key dates

Commitment date: Nov 28, 2019

Last repayment (originally scheduled): Nov 26, 2026

Stakeholders

Organizations involved in projects and activities supported by financial and in-kind transfers from Chinese government and state-owned entities

Ultimate beneficial owners

At least 25% host country ownership

Funding agencies

State-owned companies

ICBC Financial Leasing Co., Ltd. (ICBCFL) (ICBC Leasing)

Receiving agencies

Private Sector

Frontline Ltd.

Implementing agencies

Private Sector

Trafigura Maritime Logistics (TML)

Loan description

ICBC Financial Leasing signs $544 million sale-and-leaseback financing agreement with Frontline for the acquisition of ten suezmax vessels

Interest rate (t₀)•4.19513%Interest type•Variable Interest RateLoan tenor•6-month rateMaturity•7 years

Narrative

Full Description

Project narrative

On November 28, 2019, ICBC Financial Leasing (ICBCFL), Industrial and Commercial Bank's (ICBC) wholly-owned financial leasing subsidiary, signed a $544 million sale-and-leaseback financing agreement with Frontline to finance the cash portion of the company's acquisition of ten (10) suezmax vessels from Trafigura Maritime, which was finalized in 2019. The facility had a maturity of seven (7) years and an amortization profile of 17.8 years, implying a balloon payment at the conclusion of the loan, and carried an interest rate of 230bps (2.3%) plus contemporary LIBOR. Frontline had several purchase opportunities through the life of the loan and held a purchasing obligation on the leased vessels on the conclusion of the loan.

Staff comments

1. 'Suezmax' refers to ships which are built to the maximum possible size allowed through the Suez Canal. 2. An amortization profile determines the schedule of payments on a loan. As the amortization profile (17.8 years) is longer than the reported maturity or tenor (7 years), the outstanding amount on the loan would have been due after 7 years in a lump sum payment commonly referred to as a balloon payment.