ICBC contributes to $1.3 billion syndicated receivables-backed trade finance facility to COCOBOD for 2018/2019 crop season and payment for other liabilities (Linked to Record ID#92018)

📋 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. Reuters and other media sources cite a 12-month repayment period with an interest rate of LIBOR plus 0.625 percent. However, the Parliament of Ghana and COCOBOD (source #150885) refer to a 7-month repayment period, an interest rate of LIBOR plus 60 basis points (0.60 percent), and a 0.625 percent flat fee. AidData relies on the information provided by official sources (Parliament of Ghana and COCOBOD). 3, The individual contributions of the banks that participated in the lending syndicate are unknown. For the time being, AidData assumes equal contributions ($61,904,761) across all 21 members of the syndicate, which implies that the total financial commitment from the two Chinese state-owned banks was $123,809,522. Record ID#86573 captures ICBC's individual contribution while Record ID#92018 captures BOC's individual contribution.
3. Ghana’s cocoa production is regulated by the Ghana Cocoa Board (COCOBOD), an organization separate from the Ministry of Food and Agriculture that is wholly owned by the Government of Ghana. COCOBOD does not purchase any of the cocoa which is exported, but is responsible for assuring the quality of the product. To ensure the high quality of Ghana’s cocoa exports, the COCOBOD oversees horticulture practices and regulates the use of pesticides and fertilizer. In addition, COCOBOD sets the producer prices for cocoa farmers and, through a subsidiary, oversees the marketing of cocoa. The operations of the COCOBOD are funded through the receipt of a percentage of the revenue received from cocoa exports, but all profits after covering expenses are passed onto the Government of Ghana in the form of export taxes.
4. In August 2017, COCOBOD told the country’s parliament it was in financial distress due to obligations that included servicing China Eximbank loans for the Bui Dam Construction Project (captured via Project ID#183, ID#30801, ID#30709, and ID#30086).
5. The contractual terms outlined in a document to the Parliament of Ghana indicate that the security margin is the assignment of cocoa contracts for 110% of the facility amount.
6. The commitment fee is referred to in the source documentation as a ’35% on interest margin’. AidData has assumed that the 0.625% flat (upfront) fee is functionally equivalent to a management fee.

📚 Sources & References

• Cocobod senior syndication closes
• Cocobod favours Chinese banks with loan mandate
• Cocobod mandates senior banks for $1.3bn PXF
• Parliament proves trade finance for COCOBOD, $1.3BN Cocobod Loan To Rescue Cedi -$650M To Hit BoG’s Account From October 4
• UPDATE 2-Ghana's Cocobod signs $1.3 bln syndicated loan for 2018/19 cocoa buying
• REPORT OF THE FINANCE COMMITTEE ON THE TERMS OF A RECEIVABLES BACKED TRADE FINANCE FACILITY BETWEEN GHANA COCOA BOARD (COCOBOD) AND A CONSORTIUM OF BANKS AND FINANCIAL INSTITUTIONS
• WITH THE GOVERNMENT OF THE REPUBLIC OF GHANA AS GUARANTOR
• FOR AN AMOUNT OF UP TO ONE BILLION
• THREE HUNDRED MILLION UNITED STATES DOLLARS (US$1,300,000,000.00) FOR THE PURCHASE OF COCOA IN GHANA FOR THE 2018/2019 CROP SEASON, 49th Annual Report and Financial Statements
• LIVE STREAM: $1.3 BILLION SYNDICATED LOAN FACILITY SIGNING CEREMONY
• Cocobod in financial distress, seeks Stamp Duty exemption 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.