Narrative
Full Description
Project narrative
On August 10, 2000, the Bank of China (BOC), through its New York branch, contributed $2.5 million to a $1 billion revolving credit facility to Global Crossing. The facility had a maturity of around four (4) years, maturing on July 2, 2004. The interest rate on BOC's portion of the loan is currently being estimated as 1.25% (see staff comment #1). The loan carried commitment and management fees, but the precise costs are currently unknown. Forty-three (43) institutions participated in the lending syndicate. Chase Manhattan Bank acted as administrative agent. Goldman Sachs acted as syndication agent. Goldman Sachs and Chase Securities acted as joint lead arrangers and joint book managers. Citigroup and Merrill Lynch Capital acted as co-documentation agents. Salomon Smith Barney, Merrill Lynch Capital, CIBC, and Deutsche Bank acted as arrangers. Chase Manhattan Bank contributed $52 million. CIBC Bank, Citigroup, and Deutsche Bank each contributed $47 million. ABN AMRO, Bank of America, Bank of Montreal, Bayerische Hypo- und Vereinsbank, Bayerische Landesbank (BayernLB), Credit Lyonnais, Fleet Boston Financial, the Industrial Bank of Japan, the Royal Bank of Canada (RBC), and WestLB each contributed $35.5 million. IBM Credit contributed $34 million. First Union National Bank (now Wells Fargo) contributed $33 million. Cooperatieve Centrale Raiffeisen-Boerenleenbank contributed $30 million. Merrill Lynch Capital contributed $27.5 million. TD Bank contributed $26.5 million. Kreditanstalt fuer Wiederaufbau (KfW) contributed $26.25 million. Bank One contributed $20 million. Dresdner Bank contributed $17.75 million. Mitsubishi Trust and Banking Corporation contributed $17.5 million. Barclays contributed $17 million. Rabobank contributed $15.5 million. Goldman Sachs and Gulf International Bank (GIB) each contributed $15 million. BHF Bank, Bank of Nova Scotia (Scotiabank), Bank of Scotland, Bank United, Chang Hwa Commercial Bank, CoBank, Erste Bank, and KBC Bank each contributed $12.5 million. Dai-Ichi Kangyo Bank (DKB) and General Electric Capital each contributed $10 million. Bank Leumi, Bank of Hawaii, and IKB Deutsche Industriebank each contributed $7.5 million. Banque Worms and City National Bank each contributed $5 million. Bank of China (BOC) contributed $2.5 million. On January 29, 2002, Global Crossing filed for bankruptcy protection after accruing $12 billion in debt. The effect of the bankruptcy on this loan is currently unknown.
Staff comments
1. For the time being, AidData is estimating the revolving credit facility's interest rate (1.25%) as the lowest possible interest rate implied by the reported interest rate spread. Global Crossing's Moody's rating was likely Ba2 at the time of lending, which would have implied a rate of 1.25% plus the greater between the Prime Rate and the Federal Funds Effective Rate under the facility's Alternate Base Rate rules, or 2.25% plus and 'Adjusted LIBO Rate' of contemporary LIBOR multiplied by the Statutory Reserve Rate. Therefore, the actual interest rate was certainly higher than this reported rate. Moody's rating information was taken from this source: https://www.moodys.com/credit-ratings/Global-Crossing-Ltd-credit-rating-600051274