Indonesian agri-financing landmark:
MLAs: ABN Amro, Santander, China Development Bank, CITIC Bank International, WestLB
Borrower: Gold Crest Capital
Amount: $600 million
Tenor: 5 years
Guarantor: Asia Pacific Resources International Ltd (April)
Lawyers: Ashurst
Coming in eventually at $600 million, this transaction for pulp and paper producer April International Group (AIG) is not only one of the largest syndicated, structured, pre-export finance (PXF) deals for a producer in Indonesia in 2011, but in the whole of South-East Asia.
The deal is a comprehensively structured, secured PXF, benefitting from pledges on both the proceeds of the diversified export flows and local Indonesian sales. The borrower is Gold Crest Capital, a single purpose vehicle incorporated in British Virgin Islands, wholly-owned by AIG. The funds are being used for capex, working capital, general corporate purposes and for the refinancing of debt
The deal was brought to the market by ABN Amro acting as initial mandated lead arranger (MLA). Other MLAs on the deal were Santander, China Development Bank, CITIC Bank International and WestLB.
The solid, ring-fenced structure of the deal was further enhanced by share pledges of the operating companies in Indonesia as well as a floating charge over the assets of the operating companies. There is also a full corporate guarantee from the parent. The extensive security package required a highly coordinated execution process between lawyers, banks and the different parts of the company in a challenging legal environment.
The pricing and structure of the transaction attracted a highly diversified pool of international banks. There was also a ‘green shoe’ option that allowed further banks to join after the deal was closed at $525 million in September. This was exercised and raised the final amount to $600 million in December 2011, despite market condition. In a broad-based syndication, European, Japanese, Taiwanese and Middle Eastern banks rose to the challenge. ABN acts as facility agent.
Maaike Steinebach, regional head of energy, commodities and transportation Asia, at ABN Amro, comments: “We are very excited to receive this Deal of the Year award for the April transaction. It re-emphasises the commitment of ABN Amro to its clients and the agri-sector, by thinking of creative solutions to their financing needs in Asia, which we consider a key growth area for our energy, commodity and transportation business, as well as to Indonesia which continues to outperform its peers.”
Jean Tournaire, executive director, structured trade and commodity finance, at Santander, also comments: “The deal leverages on a comprehensive structure with a strong security package including assignment of both domestic sales in Indonesia and exports, pledges of the shares of the operating subsidiaries and pledge on pulp inventories. The strong structure of the facility and the composition of the banking pool with strong participations from both European and Asian banks made this facility a landmark for Asian companies in 2011.”
