SEPANG - MAHB is pleased to announce that the syndication of a EUR500 Million Senior Secured Syndicated Term Loan Facility (“Term Loan” or the “Facility”) undertaken by ISG, a 100% wholly-owned subsidiary of MAHB was successfully completed following the execution of all relevant agreements.
The Facility is guaranteed by ISG’s shareholders, MAHB group and was pre-funded and fully underwritten by BNP Paribas Fortis S,A./N.V. (“BNP”), CIMB Bank Berhad, Labuan Offshore Branch (“CIMB”) and Deutsche Bank AG, Singapore Branch (“DB”), jointly the Mandated Lead Arrangers and Bookrunners (“MLABs”).
The Term Loan was funded on 24 December 2014, just a week before the 100% acquisition of ISG by MAHB on 31 December 2014 with the objective of reducing the cost of funding for ISG. The pre-funding of the Facility by the MLABs demonstrates their confidence with ISG’s performance and their comfort in MAHB’s ability to complete the acquisition. The proceeds from the Facility were utilised for the refinancing of the Borrower’s existing borrowings, working capital requirements and general corporate purposes.
Prior to the launch of general syndication exercise, Export-Import Bank of Malaysia Berhad joined into the Facility as a Mandated Lead Arranger. Syndication was launched on 20 January 2015 and had received a strong and positive response from 19 banks covering Europe, Middle East and Asia. The syndication recorded oversubscription and total firm commitments of approximately EUR1 Billion. Such strong response during syndication enabled MAHB to successfully reduce the margin on the Facility from 2.75% p.a. over Euribor to 2.50% p.a. over Euribor through the reverse flex structure (interest margin reduction mechanism), a testament to the strong demand for MAHB’s and ISG’s credit. This marks the first reverse flex exercise by a corporate borrower outside of the United States.
MAHB's effort in pushing for reverse-flex structure has received much compliment from International Financing Review, one of the world's leading provider of global capital market intelligence, dated 7 March 2015. It was cited that MAHB despite not borrowing internationally, is surprisingly well versed with the intricacies of the market as it pushes for the reverse-flex structure, despite its rarity in global debt market.
The final breakdown of lenders consist of a range of banks from various countries including Malaysia, Belgium, Singapore, Turkey, London, Germany, and Taiwan, among others. Deutsche Bank AG, Singapore Branch is the Facility Agent under the Facility.