Hogan Lovells Advises on Landmark US$20 Billion Financing
05 August 2010
HONG KONG, 5 August 2010 - Hogan Lovells has advised Petroleos de Venezuela (PDVSA) and Bandes (Ministry of Finance of Venezuela) on two loan facilities with a combined value of US$20 billion from China Development Bank (CDB).
The financing required complex negotiations around three systems of law and involved oil sales contracts from PDVSA to China National United Oil (SINOIL). The first US$10 billion facility is governed by English law. The second RMB70 billion facility (equivalent to US$10 billion) is governed by Chinese law, whilst the oil contract between PDSVA and SINOIL is governed by Venezuelan law. The loans will be repaid with the proceeds coming from the sale of 200,000 barrels of oil per day from PDVSA (on behalf of the Republic) to SINOIL. The formal signatory event was held on July 29th in Caracas.
This represents the largest financing ever made by CDB and the largest Chinese financing in Latin America. The loan facilities will be used to finance infrastructure and social projects in Venezuela.
The Hogan Lovells team was led by partner Bruno Ciuffetelli in the Caracas office and comprised of partners Keith Larson in Washington D.C., Jose Valdivia in Miami, Luis Bottaro in Caracas, Ken Hawkes in Singapore and Jun Wei in Beijing.
Commenting on the transaction Bruno Ciuffetelli said:
"We are delighted to have been able to represent PDVSA and Bandes on this landmark financing for both Venezuela and China. This deal represents to us a step further in the interaction between our Asian and Latin American practices.
Hogan Lovells' Finance practice is well placed to advise our clients on transactions of this calibre and complexity. By leveraging our global network we were able to effectively undertake concurrent negotiations under different legal systems, across different time zones, to deliver innovative and mutually beneficial terms for all parties concerned".