ICBC (London) contributes to $1 billion syndicated loan — via PxF facility — to KAZ Minerals Finance PLC for general corporate and trade financing purposes in January 2020

📋 Staff Comments

1. 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.
2. The sizes of the individual contributions of Bank of China and ICBC to the lending syndicate are unknown. For the time being, AidData assumes equal contributions across all 19 known members of the syndicate ($52,631,578).
3. 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.
4. KAZ Minerals plc is a British copper company focused on large scale, low cost open pit mining in Kazakhstan. The Group is listed in London and Kazakhstan stock exchanges.
5. The bank account pledge agreement can be accessed in its entirety via https://www.dropbox.com/s/s5thw6509yke9ln/Bank%20Account%20Pledge%20Agreement%20for%202020%20Kaz%20Minerals%20PxF%20Facility.pdf?dl=0.
6. The trader assignment agreement can be accessed in its entirety via https://www.dropbox.com/s/sesb1s8j4myi6fc/Trader%20Assignment%20Agreement%20for%202020%20Kaz%20Minerals%20PxF%20Facility.pdf?dl=0.
7. The legal support under the transaction was provided by Hogan Lovells and Linklaters.
8. Several sources refer to the 2020 PxF facility as a refinancing or extension of similar PxF facilities that the borrower secured in December 2012 and June 2017.

📚 Sources & References

• REFINANCING OF PRE-EXPORT FINANCE DEBT FACILITY AND INCREASE TO $1.0 BILLION
• Sovcombank Took Part in a Syndicated Credit Facility for Kaz Minerals
• Trader Assignment Agreement
• Bank Account Pledge Agreement
• Kaz Minerals upsizes and extends pre-export finance facility 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.