Aus & NZ: Sydney desalination plant in offshore Japanese loan

15 March 2018 - 12:00 am UTC

The sponsors of Sydney’s Kurnell Desalination Plant expect to finalise the sell down an AUD 400m Japanese-issued bank loan next week, two sources said.

The sell down follows in the wake of project company SDP Finco reaching financial close on a AUD 1.655bn refinancing for the project on 28 February.

MUFG is underwriting the Samurai loan, which allows the borrower to access liquidity from the Japanese market, the sources said. 

A portion of the loan is being sold down to a group of Japanese and foreign lenders in Australian and US dollar tranches, added one of the sources. Existing lenders all participated in the new three- and five-year portions in the refinancing.

These include ANZ, Commonwealth Bank (CBA), Export Development Canada, HSBC, MUFG, NAB, RBC, SMBC and Westpac. They were joined by newcomers Norinuchukin and Société Generale, the second source said. 

The original facility, dating from 2015, included an AUD 414.27m three-year loan, and AUD 598.3m five- and seven-year tranches maturing in 2020 and 2022, according to InframationDeals. 

The Samurai loan will replace the seven-year facility, both sources said. 

RBC is advising on the refinancing. 

Hastings Funds Management and Ontario Teachers’ Pension Plan acquired the desalination plant in 2012 for AUD 2.3bn. 

Japanese banks are increasingly seeking to lend to offshore infrastructure projects, especially in developed countries like Australia that have transparent legal systems.

Aquasure, a desalination plant in Victoria, took out a Samurai loan in an AUD 766m refinancing completed in October 2017, in which Nippon Life participated. 

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