Royal Dutch Shell Plc has signed a $10 billion revolving credit facility, a statement from the company revealed.
The $10 billion credit facility consists of a five-year, $8 billion revolving credit facility, and a one-year $2 billion facility. Each facility includes a two one-year extension options at the discretion of each lender. The new facility will reportedly replace Shell’s existing $8.84 billion credit facility, which was provided by a syndicate of 25 banks.
Speaking on the signing, Russell O’Brien, Group Treasurer at Shell said, “We are delighted to support the transition to new benchmark interest rates with this, market-leading, syndicated SOFR facility.
“This is an innovative deal which also demonstrates Shell’s broad-based commitment to reducing the Net Carbon Footprint of the energy products we sell. We appreciate the strong support and commitment from our relationship banks.”
Details on the credit: Shell, according to the statement, said that with the termination of the London Interbank Offered Rate (LIBOR), this credit facility is one of the world’s first credit facilities linked to the new Secured Overnight Financing Rate (SOFR).
The interest and fees paid on the facility will be connected to Shell’s progress towards reaching its short-term Net Carbon Footprint intensity target, as reported by The Nation. Bank of America and Barclays Bank acted as joint co-coordinators for the facility.
The banks, which participated in the facility include ANZ, Bank of China, Banco Santander, BNP Paribas, Citibank, Credit Agricole Corporate and Investment Bank, Credit Suisse, Deutsche Bank, Goldman Sachs, HSBC, Industrial and Commercial Bank of China, JP Morgan, Lloyds Bank, Mizuho Bank, Morgan Stanley, Natixis, Royal Bank of Canada, Sumitomo Mitsui Banking Corp, Société Générale, Standard Chartered Bank, TD Securities, UBS and Wells Fargo.
More on the Net Carbon Footprint intensity target: Shell’s ambition of Net Carbon Footprint intensity target is to reduce the energy products it sells by around 50% by 2050 and by 20% by 2035 in step with society as it moves towards meeting the aims of the Paris Agreement. The company has also set a three-year target to reduce its Net Carbon Footprint by 2-3% by 2021.