White & Case Transactions Win Four LatinFinance Infrastructure Finance Awards
White & Case advised on two transactions that recently won four LatinFinance Infrastructure Awards.
The winning deals were:
Best Power Financing, Best Renewable Energy Financing, Best Infrastructure Financing: Andes—Chaglla hydroelectric power project financing
We represented Empresa de Generación Huallaga S.A. as borrower and Odebrecht Energia S.A. as sponsor in the development, construction and project financing of the US$1.2 billion 406 MW Chaglla hydroelectric power generation project in Peru. The run-of-the-river plant consists of a 400 MW main power plant and a 6 MW auxiliary plant, a 127-kilometer long, 220-kilovolt transmission line, 34 kilometers of permanent access roads, a 202-meter concrete-faced rockfill dam, a surface powerhouse and diversion, spillway and headrace tunnels. This transaction was also selected as “2013 Americas Renewable Deal of the Year” by Project Finance International magazine, “2013 Latin American Power Deal of the Year” by Project Finance magazine, "2013 Power Deal of the Year" by Infrastructure Journal, “2013 Project Finance Deal of the Year” by Latin Lawyer magazine and one of the “2013 Deals of the Year” by Trade Finance magazine.
The financing structure incorporates unique features for a project of this type, including limited contingent equity sponsor support and no completion guaranty. This was also Brazilian National Bank for Economic and Social Development’s (BNDES) first significant investment in Peru and one of the few cross-border financings in which BNDES lent through its export credit window. The financing involved negotiating more than 25 complex financing and security agreements, in addition to negotiating amendments to several of the project documents, including to the lump-sum, turnkey engineering, procurement and construction contract with Odebrecht Peru Ingeniería y Construcción SAC, as EPC contractor, and the power purchase agreement with Electroperu, as offtaker.
Best Infrastructure Financing: Mexico—Offshore Drilling Holding 8.375% 2020 bond
We represented Citigroup Global Markets Inc. and Credit Suisse Securities (USA) LLC, as global coordinators, joint bookrunners and initial purchasers, and Deutsche Bank Securities Inc. and Santander Investment Securities Inc., as joint bookrunners and initial purchasers, in the inaugural issuance by Offshore Drilling Holding S.A. (the Company) of US$950 million in aggregate principal amount of its 8.375% senior secured notes due 2020 (the Notes). The Company is controlled by Grupo R, a leading provider of oilfield services in Mexico with more than 50 years of experience.
The Company is an offshore drilling company focused on owning and operating a fleet of state-of-the-art offshore drilling units with shallow water, midwater, deepwater and ultra-deepwater capabilities. The Company sought to establish a holding company as a corporate credit in an effort to move away from previous one-off structured project financings for each of its vessels. White & Case leveraged its extensive experience in both corporate and structured bond precedent transactions to implement an innovative and groundbreaking “hybrid” structure that provides significant flexibility to the Company to both efficiently manage its current fleet’s operations as well as finance future vessels to realize the Company’s fleet expansion plans. The effective blend of corporate bond structural elements with various project bond-style structure enhancements assisted the Issuer in obtaining favorable ratings and achieving a successful execution of the transaction.
In connection with the issuance of the Notes, various existing credit facilities entered into by subsidiaries of the Company and a series of existing notes issued by a subsidiary of the Company, each of which were entered into or issued, as the case may be, to finance certain of the Issuer’s existing vessels and were secured by, among other things, mortgages on certain of the Issuer’s existing vessels needed to be refinanced. To achieve such refinancing, White & Case also represented Credit Suisse Securities (USA) LLC, as dealer manager and solicitation agent, in connection with a concurrent cash tender offer for any and all of such existing series of notes. The successful execution of the cash tender offer and consent solicitation resulted in holders representing approximately 99.77% of the outstanding existing series of notes tendering their notes prior to the consent deadline, thus allowing the execution of a supplemental indenture that eliminated substantially all of the covenants and events of default related to such notes and released the liens on all of the collateral securing the notes.
The transactions involved extensive structuring, negotiation and documentation in a wide array of jurisdictions. White & Case provided US, Mexican and Spanish legal advice and also liaised with counsel in various other implicated jurisdictions, which included Belgium, the Cayman Islands, Gibraltar, Hong Kong, Luxembourg, Panama, Portugal, the Seychelles and the United Kingdom. White & Case navigated complex collateral issues related to the timing of the release of existing security interests and the taking of new security interests in each of the various jurisdictions, which resulted in a significantly minimized post-closing delay in the perfection of such new security interests. White & Case was also extensively involved in the negotiation and documentation of various underlying agreements necessary for the chartering and operation of the Company’s existing fleet.