International Financing Review March 21 2020 59LOANS ASIA-PACIFICJAPAN
NIPPON STEEL TAPS FOR ESSARNippon Steel has signed a US$5.146bn loan
to back its acquisition of Indian steelmaker
Essar Steel India.
Japan Bank for International Cooperation is
funding US$3.087bn, while Mizuho Bank,
MUFG, SMBC and Sumitomo Mitsui Trust Bank
are providing the remainder.
AMNS LUXEMBOURG HOLDING, a joint venture
between Nippon Steel (40%) and
ArcelorMittal (60%), is the borrower.
In December, Nippon Steel and
ArcelorMittal completed the Rs500bn
(US$7bn) takeover of Essar Steel, which was
among 12 large steel and infrastructure
companies that were referred to India’s
bankruptcy court in 2017.
Essar Steel had debts of nearly Rs500bn.NEW ZEALAND
AIRLINE GETS GOVERNMENT LOANAIR NEW ZEALAND has signed an agreement
with the New Zealand government for an up
to NZ$900m (US$514m) standby loan facility
to support the airline’s business as it
manages the impact of the coronavirus
outbreak.
The loan is available for 24 months and
will provide Air New Zealand with the
ability to draw down funds should its cash
reserves drop below a minimum threshold.
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NZ$300m tranches with effective interest
rates initially expected at between 7% and
8% and around 9% per annum, respectively.
The effective interest rates on both tranches
will step up by 1 percentage point if the
facility remains in place after 12 months.
The assets of the carrier and its
subsidiaries act as security for the facility,
and its availability is subject to other
conditions precedent, including agreeing on
ANûOPERATINGûlNANCEûPLANûWITHûTHEû
government and other documentary
conditions.
The debt facility agreement prohibits Air
New Zealand from paying any dividends,
including a 2020 interim dividend that was
due on March 25, as well as other
distributions to shareholders.
The government also has the ability to
seek repayment through a capital raising
from the airline after six months, or
converting the loan into equity, subject to
complying with laws and any necessary
REGULATORYûANDORûSHAREHOLDERûAPPROVALS
Other conditions precedent include Air
New Zealand giving various undertakings,representations and operational, and
informational and other undertakings, and
typical events of default.
Separately, the New Zealand government
is working with Air New Zealand to ensure
essential services can be provided, including
REPATRIATIONûmIGHTS ûMAINTAININGûCRITICALû
cargo transport lines and having staff assist
the health response.SINGAPORE
ESR BACK FOR MOREWarburg Pincus-backed industrial property
investor ESR CAYMAN has launched a US$250m
three-year loan into general syndication.
Standard Chartered Bank is the sole
mandated lead arranger and bookrunner of
the amortising loan, which has a US$250m
greenshoe.
Bank of China and China Merchants Bank
joined the deal prior to the launch of
syndication.
Proceeds will be used for general
corporate purposes and working capital.
The loan pays an interest margin of 300bp
over Libor and has an average life of 2.75 years.
MLAs joining with US$40m or above earn
top-level all-in pricing of 325.45bp via a
70bp fee, while lead arrangers taking
US$20m–$39m receive an all-in of 318.18bp
via a 50bp fee.
Last October, ESR Cayman raised US$1.6bn
in an IPO in Hong Kong. The company had
said it would spend US$404m of the IPO
proceeds to repay debt, and US$162m to
develop some existing logistic properties and
increase its current co-investments.
ESR Cayman is a sponsor of Singapore-
listed and Hong Kong-headquartered
ESR-REIT, which owns industrial properties
in China, Japan, South Korea, Singapore,
Australia and India.
On February 28, RBC Investor Services
Trust Singapore, the trustee for ESR-REIT,
signed a S$200m (US$143.8m) two-year
unsecured loan.
Separately, ESR Group Pty closed a
A$180m (US$120m) three-year loan last
month for the refurbishment of a mixed-use
commercial property in North Sydney it
JOINTLYûOWNSûWITHûPRIVATEûEQUITYûlRMû
Partners Group. It offered an interest
margin of 185bp over BBSY.THAILAND
TESCO M&A LOAN HITS SENIORA dual-tranche bridge loan of about
US$7.25bn backing Thai billionaire Dhanin
Chearavanont’s purchase of Tesco’s Asianbusiness has been launched into senior
syndication.
JP Morgan, Siam Commercial Bank and UBS
are the mandated lead arrangers,
bookrunners and underwriters of the
borrowing, which is the largest on record
from Thailand.
The loan is split into a US$3.25bn 12-
month tranche and a US$4bn 18-month
portion.
The opening interest margin for both
tranches is 150bp over Libor before a step-up
kicks in after six months from signing.
Banks are invited to join in senior
syndication with tickets of US$1bn on a pro
rata basis across both tranches.
One of the listed subsidiaries of CHAROEN
POKPHAND GROUP is the borrower on the 12-
month tranche, while the 18-month portion
is being borrowed through a special purpose
vehicle.
The SPV is the acquiring entity for CP
Group’s successful US$10.6bn bid for Tesco’s
1,965 stores in Thailand and 74 outlets in
Malaysia.
The three MLABs and Thai boutique
investment bank The Quant Group are
buyside advisers to CP Group.
$HANINSûmAGSHIPûISûTHEûOPERATORûOFû û
7-Eleven convenience stores through CP All
and about 80 cash-and-carry stores under
Siam Makro.
CP Group will gain control of Tesco’s
operations in Thailand – much of which the
"RITISHûlRMûBOUGHTûFROMûTHEûFORMERûDURINGû
THEûnû!SIANûlNANCIALûCRISISûnû
including 200 Tesco Lotus hypermarkets and
1,600 Tesco Lotus Express convenience
stores.
The bridge loan for Dhanin’s CP Group is
the largest from Thailand, eclipsing Berli
*UCKERSû53BN
EQUIVALENTûlNANCINGûINû
March 2016 for its purchase of a 58.56%
stake in Thai hypermarket operator Big C
Supercenter from France’s Casino Group.
CP Group’s previous jumbo loan was a
RElNANCINGûOFûSLIGHTLYûOVERû53BNûINû
January 2014.
0ROCEEDSûRElNANCEDûAû53BNû
month bridge loan that CP All signed in June
2013 for its purchase of wholesaler Siam
Makro.INDORAMA NETS FIRST SLL NINJA LOANChemical producer INDORAMA VENTURES has
closed a US$255m sustainability-linked loan
INû*APAN ûTHEûlRSTûSUCHûSYNDICATEDû.INJAû
borrowing in the country.
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YEARûBULLETûLOANûOFFERSûPRICINGû
linked to the borrower’s environmental,
social, and governance score.
Mizuho Bank was the sole mandated lead
arranger and bookrunner, while 15 other
lenders joined in syndication, including 779 IFR Loans 2325 p 55 - XX.indd 59 20 / 03 / 2020 19 : 00 : 39