Narrative
Full Description
Project narrative
In December 2017, financial close was reached on a deal in which a syndicate of 15 banks — including the Bank of China (BOC), the Bank of Communications (BoComm), China Merchants Bank, the Industrial and Commercial Bank of China (ICBC) — entered into a $4.108 billion USD syndicated loan agreement with Nesta Investment Holdings Limited — a Cayman Islands-incorporated special purpose vehicle (SPV), a wholly-owned subsidiary of Nesta Investment Holdings MidCo Limited, itself a wholly-owned subsidiary of Nesta Investment Holdings TopCo Limited, which is in turn wholly-owned by Nesta Investment Holdings, L.P. (NIHLP), an exempted limited partnership organized under the laws of the Cayman Islands that is owned by a consortium comprising Chinese private equity firm HOPU Logistics Investment Management Co., Ltd. (HLIM) (21.3% equity stake), China-based private equity investment firm Hillhouse Capital Logistics Management, Ltd. (HCM) (21.2% equity stake), SMG Eastern Limited (SMGEL), a Cayman Islands-incorporated investment holding vehicle controlled by Global Logistics Properties (GLP) CEO Mr. Ming Mei (21.2% equity stake), Chinese state-owned Bank of China Group Investment Limited (BOCGI) (15.0%), and Vanke Real Estate (Hong Kong) Company Limited (VREHK), a subsidiary of Chinese real estate developer China Vanke Co., Ltd. (21.4% equity stake) — for the Global Logistic Properties (GLP) Acquisition and Privatization Scheme. This loan was divided into four tranches: a $750 million USD term loan tranche with a maturity period of five years and an interest rate of LIBOR plus an opening margin of 135 basis points (bps) (known as 'Tranche A1'), a $750 million USD term loan tranche with a maturity period of three years and an interest rate of LIBOR plus an opening margin of 120 bps (known as 'Tranche A2'), a $2.108 billion USD term loan tranche with a maturity period of two years and an interest rate of LIBOR plus an opening margin of 110 bps (known as 'Tranche B'), and a $500 million USD revolving credit facility (RCF) tranche with a maturity period of five years and an interest rate of LIBOR plus an opening margin of 135 bps. The blended maturity was 3.095 years for the four tranches and the blended margin was 124.06 bps. GLP's operating subsidiaries provided guarantees for the deal. The debt was planned to be pushed down to GLP's China and Japan operating companies once completed. The interest rates were linked to GLP's credit rating six months from initial utilization; if GLP's rating was BBB+/Baa1 or higher, Tranche A1's and the RCF's interest margin would be 115 bps, Tranche A2's interest margin would be 105 bps, and Tranche B's interest margin would be 100 bps. If GLP's rating was BBB/Baa2, then Tranche A1's and the RCF's interest margin would be 125 bps, Tranche A2's interest margin would be 112.5 bps, and Tranche B's interest margin would be 105 bps. If GLP's rating was BBB-/Baa3, then Tranche A1's and the RCF's interest margin would be 135 bps, Tranche A2's interest margin would be 120 bps, and Tranche B's interest margin would be 110 bps. If one or more ratings were invest grade and at least one was non-investment grade, Tranche A1's and the RCF's interest margin would be 150 bps, Tranche A2's interest margin would be 135 bps, and Tranche B's interest margin would be 120 bps. If all ratings were in the high-yield spectrum range, Tranche A1's and the RCF's interest margin would be 185 bps, Tranche A2's interest margin would be 160 bps, and Tranche B's interest margin would be 140 bps. Record ID#99682 captures BOC's contribution to $750 million USD Tranche A1. Record ID#99683 captures BOC's contribution to $750 million USD Tranche A2. Record ID#99684 captures BOC's contribution to $2.108 billion USD Tranche B. Record ID#99685 captures BOC's contribution to the $500 million USD RCF tranche. Record ID#99687 captures BoComm's contribution to $750 million USD Tranche A1. Record ID#99688 captures BoComm's contribution to $750 million USD Tranche A2. Record ID#99689 captures BoComm's contribution to $2.108 billion USD Tranche B. Record ID#99690 captures BoComm's contribution to the $500 million USD RCF tranche. Record ID#99691 captures China Merchant Banks's contribution to $750 million USD Tranche A1. Record ID#99692 captures China Merchant Banks's contribution to $750 million USD Tranche A2. Record ID#99693 captures China Merchant Banks's contribution to $2.108 billion USD Tranche B. Record ID#99694 captures China Merchant Banks's contribution to the $500 million USD RCF tranche. Record ID#99695 captures ICBC's contribution to $750 million USD Tranche A1. Record ID#99696 captures ICBC's contribution to $750 million USD Tranche A2. Record ID#99697 captures ICBC's contribution to $2.108 billion USD Tranche B. Record ID#99698 captures ICBC's contribution to the $500 million USD RCF tranche. In addition to the four Chinese state-owned banks, the following lenders contributed to the loan syndicate: Citibank N.A., DBS Bank, Goldman Sachs, Mizuho Bank, the Bank of Tokyo-Mitsubishi UFJ, Ltd. (BTMU), Sumitomo Mitsui Banking Corporation (SMBC), BNP Paribas S.A., Norinchukin Bank, Mega International Commercial Bank, KGI Bank, and Taishin International Bank. BOC, BoComm, China Merchants Bank, ICBC, Citibank, DBS Bank, Goldman Sachs, Mizuho, and BTMU served as mandated lead arrangers and bookrunners (MLABs). SMBC served as a mandated lead arranger. BNP Paribas S.A. and Norinchukin Bank served as lead arrangers. Mega International Commercial Bank served as arrange. KGBI Bank and Taishin International served as lead arrangers. Citi and Goldman Sachs were the original underwriters, underwriting a $4.65 billion USD loan before the borrower cancelled and pre-paid segments to reduce the loan to $4.108 billion USD to senior syndication. Citi, Goldman Sachs, BTMU, DBS, and Mizuho served as the initial MLABs; BOC, BoComm, China Merchants, and ICBC joined during senior syndication at the MLAB level. General syndication was launched in September 2017. Furthermore, in 2018, a syndicate of at least two banks — including China Construction Bank (Asia) Corporation (CCB (Asia)) and ICBC — entered into a $3.38 billion USD syndicated loan agreement with V-Nesta Investment Partner II Limited (NIP II) and V-Nesta Investment Partners III Limited (NIP III) — upper-level British Virgin Islands-incorporated special purpose vehicles (SPVs) affiliated with Nesta Investment Holdings — to support the equity capital of the acquiring consortium in the GLP Acquisition and Privatization Scheme. This loan consisted of a $1.817 billion USD term loan tranche and a $223 million USD RCF to NIP II and a $1.23 billion USD term loan and $110 million USD RCF to NIP III. The loan carried a blended interest rate of LIBOR plus 275 bps and a blended maturity period of 4.68 years. CCB (Asia) and ICBC served as mandated lead arrangers and bookrunners. HOPU Logistics Investment Management Co., Ltd. and Vanke Real Estate (Hong Kong) Company Ltd helped raise these loans. Record ID#99699 captures CCB (Asia)'s contribution to the $1.817 billion USD term loan tranche. Record ID#99700 captures CCB (Asia)'s contribution to the $223 million USD RCF tranche. Record ID#99701 captures CCB (Asia)'s contribution to the $1.23 billion USD term loan tranche. Record ID#99702 captures CCB (Asia)'s contribution to the $110 million USD RCF tranche. Record ID#99703 captures ICBC's contribution to the $1.817 billion USD term loan tranche. Record ID#99704 captures ICBC's contribution to the $223 million USD RCF tranche. Record ID#99705 captures ICBC's contribution to the $1.23 billion USD term loan tranche. Record ID#99706 captures ICBC's contribution to the $110 million USD RCF tranche. The proceeds were to be used by the borrowers for the $11.6 billion USD leveraged buyout (LBO) and privatization of Singapore Exchange (SGX)-listed logistics company Global Logistic Properties Limited (GLP). GLP is the owner and developer of logistics facilities in Brazil, China, Japan, and the United States; GLP also offered fund management services for its business involving leveraging its fund management platform to recycle capital from mature properties for new developments. At the time of the acquisition, GLP was earning the majority of its revenue from China {{see ID#189790}. In late 2016, GIP pushed GLP to conduct a strategic review of the business, leading to an auction for GLP. The auction received complaints from potential bidders about non-transparent practices and an alleged unfair advantage of the winning consortium because of its business ties. GLP formed a committee of independent directors to alleviate potential conflicts of interests, and it selected the Chinese consortium because of certainty and limited conditionality (the acquisition was not conditional on receiving antitrust approval or other approval from the Committee on Foreign Investment in the United States (CFIUS). On July 14, 2017, the proposed scheme of arrangement for the acquisition of GLP by Nesta Investment Holdings for $3.38 SGD per share (valuing GLP at about $16 billion SGD) was announced. GIC Private Limited, the Singaporean sovereign wealth fund and the single largest shareholder of GLP at 36.84% stake, provided an irrevocable undertaking to vote in favor of the scheme. On October 6, 2017, Singapore Exchange Securities Trading Limited (SGX-ST) issued its approval for the scheme of arrangement. GLP was delisted from the SGX on January 22, 2018, marking completion of the privatization. Global Logistics Properties was renamed GLP Pte. Ltd. upon completion of the privatization. This was reportedly the largest overseas acquisition by a Chinese real estate company, the largest privatization process in Asia, and the largest overseas acquisition in Asia in 2017. In July 2018, it was reported that a significant portion of the $4.108 billion USD loan was sold in the secondary market, with portions of the two- and three-year tranches sold at 99% of the original price and portions of the five-year tranche sold at 98% of its original price.
Staff comments
1. As "GLP’s $4.1bn LBO facility opens for retail participation" states that syndication was offered on all tranches, AidData has assumed that the four Chinese state-owned banks, as mandated lead arrangers and bookrunners, contributed to each tranche. 2. The individual contributions of the 15 lenders to the $500 million USD RCF tranche of this $4.108 billion USD syndicated loan is unknown. For the time being, AidData has estimated the contribution of the Chinese state-owned banks by assuming that each lender contributed an equal amount ($33,333,333.3333 USD) to the syndicated loan.