Royal Dutch Shell PLC’s USD10 Billion Syndicated Revolving Credit Facility

Allen & Overy has advised a syndicate of 25 lenders, including co-ordinators Barclays Bank PLC and Bank of America Merrill Lynch International Designated Activity Company, on a USD10 billion revolving credit facility for Royal Dutch Shell PLC, advised by Clifford Chance.

This is the first loan agreement governed by English law in the European loan markets to incorporate the Secured Overnight Financing Rate (SOFR), the emerging standard risk-free rate which is intended to replace LIBOR for USD loans.

Interest on Shell’s facility will initially be based on LIBOR, but the facility contains a mechanism to switch to SOFR, once the bank market is prepared for this, and for the first time in the market, sets out in detail the basis and methodology by which SOFR will be calculated. The documentation is based on the LMA “exposure draft” for SOFR. The loan also links the interest and fees paid on the facility to Shell’s progress towards its three-year target to reduce its Net Carbon Footprint by 2% to 3% by 2021 (vs 2016), as the business pursues its ambition to reduce the Net Carbon Footprint of the energy products it sells by around 50% by 2050 and by 20% by 2035 as it moves towards meeting the aims of the Paris Agreement.

Advice to the banks was provided from London by A&O partner David Campbell (Picture), global head of banking know-how Fiona FitzGerald and associate Dominique Crowley, and from Amsterdam by partner Femke Bierman and associate Géza Orbán.

Clifford Chance acted for Shell with energy and infrastructure partner John Wilkins, working with Director Olamide Oladosu.

Involved fees earner: Femke Bierman – Allen & Overy; David Campbell – Allen & Overy; Dominique Crowley – Allen & Overy; Géza Orbán – Allen & Overy; Olamide Oladosu – Clifford Chance; John Wilkins – Clifford Chance;

Law Firms: Allen & Overy; Clifford Chance;

Clients: Bank of America Merrill Lynch; Barclays Bank; Shell;