The initial financing of OCSIT, necessary to purchase the early “days” of specific stock, has been awarded through an European public tender and is structured as a 5 year bullet loan for a total amount of Euro 300 million. Such financing, due to the facts that it provides for reimbursement in one instalment, is deemed to be the most suitable financing mean, taking into consideration the activities to be carried out in the start-up period as well in the medium term.
To secure the use of the amounts to the purchase of stocks, the financing has been structured as a “financing allocated for a specific purpose”(“finanziamento destinato”) pursuant to articles 2447 bis, paragraph 1, letter b) and 2447 decies of the Italian civil code. In this respect, the financing agreement contains a provision on the opening of a dedicated bank account to collect proceeds from sales ordered or authorized by the Ministry of Economic Development.
Such proceeds will repay the debts to the lending banks in accordance with principles of proportionality and pari passu. As such, the banks will be the sole owners of the proceeds collected.
Results of the tender for the initial financing
Both primary Italian and European banks participated to the bid. The offers received reached the amount of Euro 1.3 billion, 4 times higher than the amount of Euro 300 million indicated in the bid.
The bid was awarded to a primary European bank which lent to AU/OCSIT the Euro 300 million for a period of 5 years, subject to the following conditions:
- Margin (spread on 6 months Euribor): 120 bps (1.2%)
- Yearly Up front: + 5 bps (0.05%).
- Commitment fee: 40 bps (0.4 %)
In July 2015, OCSIT renegotiated with the lending bank the financing agreement executed in June 2014, and obtained the following better conditions:
• Margin reduced from 120 to 90 basis points;
• Commitment fee reduced from 40 to 30 basis points;
• Availability period of the amounts extended from 31 December 2015 to 30 June 2016.
The renegotiation led to overall savings in financial commitments of approximately Euro 3 million, until the expiry of the agreement (June 2019).
Having used up all the €300 million of the initial financing, by the end of 2016 AU/OCSIT launched a second European public tender for a total consideration of €400 million to fund the purchase of additional stocks as provided by the industrial plan. Again the financing was structured as a 5 year bullet loan and as a “financing allocated for a specific purpose”(“finanziamento destinato”).
The tender was awarded in March 2017 with offers reaching the amount of Euro 800 million. The prevailing banks were all from Italy and some of them had grouped together in a temporary consortium.
On the second loan AU/OCSIT got the following conditions:
- Margin (spread on 6 months Euribor): 73 bps (0.73%)
- Yearly Up front: 2 bps (0.02%).
- Commitment fee: 21,9 bps (0.219%)
Considering that in 2019 OCSIT will be
- Reimboursing the initial Euro 300 million loan;
- Purchasing stocks for almost Euro 180 million as planned;
- Consuming all the funds deriving from the second financing;
a bond issue has been identified as a future mean of financing.
In such a latter case, OCSIT will proceed to obtain a rating by a primary agency rating, consistently with what other European central stockholding entities have already done.