Shell Signs $10B Revolving Credit Facility
Royal Dutch Shell plc announced Friday that it has signed a $10 billion revolving credit facility.
The new facility replaces Shell’s existing $8.84 billion revolving credit facility and is provided by a syndicate of 25 banks. The unsecured revolving credit facility consists of a five-year, $8 billion revolving credit facility, and a one-year, $2 billion facility. Each facility includes two one-year extension options at the discretion of each lender.
Shell stated that this is one of the world’s first credit facilities linked to the new Secured Overnight Financing Rate (SOFR). The company also revealed that the interest and fees paid on the facility will be linked to Shell’s progress towards reaching its short-term Net Carbon Footprint intensity target.
Shell has set an ambition to reduce the Net Carbon Footprint of the energy products it sells by around 50 percent by 2050 and by 20 percent by 2035. The company has also set a three-year target to reduce its Net Carbon Footprint by two percent to three percent by 2021 as compared to 2016.
“We are delighted to support the transition to new benchmark interest rates with this, market leading, syndicated SOFR facility,” Russell O’Brien, group treasurer at Shell, said in a company statement.
“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,” he added.
Shell is an international energy company involved in the exploration, production, refining and marketing of oil and natural gas, and the manufacturing and marketing of chemicals.
A revolving credit facility is a committed bank loan facility which allows a company to borrow funds at short notice if required.
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