Bank of China contributes to £1.1 billion tranche of multi-currency, syndicated facility for Melrose Industries plc's acquisition of GKN

Project narrative

On January 17, 2018, a new multi-currency, syndicated M&A committed bank facility was entered into by Melrose Industries plc (a British aerospace manufacturing company based in Birmingham, England) to assist with the acquisition of GKN plc (a British multinational automotive and aerospace components business headquartered in Redditch, England). This facility served to replace a previous bank facility of $1.25 billion, which was repaid and officially cancelled on April 30, 2018. The new facility included a £1.5 billion multi-currency term loan with a duration of three years and six months (captured via Record ID#99579). In addition, the new facility included a five-year multi-currency revolving credit facility broken up into multiple currency tranches, denominated £1.1 billion (captured via Record ID#99583), $2.0 billion (captured via Record ID#99584), and €0.5 billion (captured via Record ID#99585). Lloyds Bank and RBC Capital Markets acted as book runners, and BNP Paribas, Bank of China, Barclays, Commerzbank, Crédit Agricole, HSBC, JP Morgan, NatWest Markets, Santander, Standard Chartered, UniCredit, and Wells Fargo were mandated lead arrangers. On October 29, 2018, £663 million of the new term loan was surplus to requirements, and therefore cancelled, because potential change of control clauses of the bonds were not exercised by the relevant bondholders. At December 31, 2018 the drawings on the term loan were £100 million and $960 million. There was a significant amount of headroom on the multi-currency committed revolving credit facility, as at December 31, 2018. Applying the exchange rates as of December 31, 2018, the headroom equated to £1.352 billion, which included an amount available to replace the 2019 bond when it matured (or before). In April 2018, Melrose Industries plc successfully acquired GKN plc for £8.1 billion ($11 billion) in a hostile takeover. During a three-month battle for GKN plc, British lawmakers raised concerns that Melrose Industries plc could in the future sell GKN plc's aerospace business, which is involved in defense programs, to an overseas buyer. However, Britain's business minister ultimately concluded that there were no national security grounds to intervene.