Bank of China contributes to $1.5 billion syndicated loan to Sonangol for general corporate purposes in October 2009

📋 Staff Comments

1. For loan and debt rescheduling records with variable interest rates, AidData calculates the all-in interest rate at T0 based on the reference rate (such as LIBOR or EURIBOR) on the loan start date, plus any known margin. Please see the methodology for additional details.
2. A pre-export finance (PXF) facility an arrangement in which a commodity (e.g. oil) producer gets up-front cash from a customer in return for a promise to repay the customer with that commodity (possibly at a discount) in the future. PXF funds may be advanced by a lender or syndicate of lenders to a commodity producer to assist the company in meeting either its working capital needs (for example, to cover the purchase of raw materials and costs associated with processing, storage and transport) or its capital investment needs (for example, investment in plant and machinery and other elements of infrastructure). PXF facilities are usually secured by (1) an assignment of rights by the producer under an ‘offtake contract’ (i.e., a sale and purchase contract between the producer and a buyer of that producer of goods or commodities), and (2) a collection account charge over a bank account into which proceeds due to the producer from the buyer of the goods or commodities under the offtake contract are credited. There are two key documents in prepayment finance transactions: a contract providing for the advance payment by the offtaker to the producer for the purchase of goods/commodities (the 'Prepayment Contract'), and a loan agreement between a lender and the offtaker (the 'Offtaker Loan Agreement') under which the advance payment is financed.
3. The loan was also known as a receivables purchase agreement facility. It was guaranteed by Sonangol EP (exploration and production).
4. The size of Bank of China’s contribution to the lending syndicate is unknown. For the time being, AidData assumes equal contributions ($100 million) across the 15 known members of the syndicate. This issue warrants further investigation.
5. During general syndication, lenders were offered top tickets of $100 million (mandated lead arranger) and $75 million (lead arranger) for respective fees of 200 basis points and 175 basis points.

📚 Sources & References

• Sonangol up to 1.5 bn after 12 join in retail, sonangol ups loan to 1.5 bn after 12 join
• U P D A T E : S o n a n g o l
• C o c o b o d s i g n u p l e n d e r s
• Sonangol signs Loan applications and disbursements are still being received and processed as the projects continue to evolve. Ongoing monitoring and evaluation are in place to ensure project continuity.