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Bank of Tokyo-Mitsubishi has been mandated by the Central Bank of the Republic of Seychelles to arrange a new US$80mn multi-tranche syndicated facility that will partially refinance the US$150mn facility signed on August 16, 2002.

Alpha Bank and Belgolaise have pre-committed as arrangers.

The facility will be guaranteed by the government of Seychelles, through its Ministry of Finance.

The facility incorporates multiple sources of repayment and has been structured so that cashflow is captured in an offshore escrow account held with the facility agent. The facility has been structured into two tranches of US$50mn and US$30mn, with maturities of three and five years.

The margin over Libor for each of the two tranches is: Tranche A: 2.75% per year; Tranche B: 3.50% per year.

In general syndication, banks are being asked to participate at one of the following levels:


































>

Status

>

Commitment amount (US$mn)

>

Participation fee (basis points)

>

3 yr tranche flat fee

>

3 & 5 yr tranche flat fee

>

5 yr tranche flat fee

>

Arranger

>

10 -15

>

110

>

117.5

>

125

>

Co-arranger

>

7.5

>

90

>

97.5

>

105

>

Lead manager

>

5

>

75

>

80

>

85

>

Manager

>

2.5

>

65

>

70

>

Banks are invited to commit to the facility on a pro rata basis (3+5 year) or in the individual tranches. As shown in the above table, banks that commit on a pro rata basis will benefit from receiving a comparatively higher fee on their relative commitment in the five-year tranche.

Under the structure, a projected total of US$35mn per year of foreign currency receivables from four separate and well established sources will be ring fenced and proceeds paid directly into an escrow account held outside the Seychelles with the agent bank. All these sources of income originate outside the Seychelles.

The flows cannot be accessed by the borrower without consent from the lenders.

The income flows are:



Tuna exports: Heinz Europe Limited and Indian Ocean Tuna Limited (IOT) – income US$24mn per year

Fishing licence fees: European Union (EU) – income US$2.8mn per year

Aircraft fly-over rights: International Air Transport Association (IATA) – income US$4.1mn per year

Passenger service fees (PSF)/airport embarkation fees: IATA – income US$3.4mn per year

The escrow account will be held with the facility agent and legally charged to the lenders. The escrow account will be opened with the aggregate of three months principal debt service. The balance must reach an amount equal to the sum of four months principal debt service cover and one-month interest service before any surplus cash received into the escrow account is released back to the borrower.