Shell signs innovative $10 billion revolving credit facility with 25 banks

HAGUE, Netherlands – Royal Dutch Shell plc (“Shell”) today announces 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.

In anticipation of the cessation of the London Interbank Offered Rate (“LIBOR”), this is one of the world’s first credit facilities linked to the new Secured Overnight Financing Rate (“SOFR”). Also, in a first for Shell, 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, as published in its Sustainability Report.

“We are delighted to support the transition to new benchmark interest rates with this, market leading, syndicated SOFR facility,” said Russell O’Brien, Group Treasurer at Shell.

“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.”

Shell has set an ambition to reduce the Net Carbon Footprint of 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. Shell has also set a three-year target to reduce its Net Carbon Footprint by 2% to 3% by 2021 as compared to 2016.

The $10 billion 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.

Bank of America and Barclays Bank acted as joint co-ordinators for the facility.

A revolving credit facility is a committed bank loan facility which allows a Company to borrow funds at short notice if required.SOFR is calculated as a volume-weighted median of transaction-level tri-party repo data collected from various market sources and published by the New York Federal Reserve Bank.

Under the terms of the deal, the LIBOR interest rate will be replaced by SOFR as early as the first anniversary of the signing date of the revolving credit facility, once the bank market is fully prepared for SOFR as an underlying rate.Shell’s Net Carbon Footprint is a measure of the emissions intensity of the portfolio of energy products sold by Shell.

The calculation includes greenhouse gas emissions – on an equity basis – from several sources, including emissions directly from Shell operation; those third parties’ emissions caused by supplying energy for that production of the products we sell; and our customers’ emissions from consumption of the products we sell.

Shell currently presents its Net Carbon Footprint calculations for annual assurance to Lloyds Register Quality Assurance, our environmental auditors, for quality assurance.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 participated in the facility.