Narrative
Full Description
Project narrative
On November 21, 2018, financial close was reached on a deal in which a syndicate of 19 banks — including the Industrial and Commercial Bank of China (ICBC) — entered into a $500.00 million USD syndicated loan agreement with North Haven Infrastructure Partners II L.P. (NHIP II) — a Cayman Islands-incorporated unlisted investment fund managed by Morgan Stanley Infrastructure Partners Inc. — for the 644 MW Bayonne Energy Center (BEC) Acquisition Project. This loan was divided into two tranches: a $450.00 million USD term loan tranche and a $50.00 million USD revolver tranche. This loan was a mini-perm loan that carried a maturity period of seven years and an interest rate of LIBOR plus an initial margin of 250 basis points (bps), stepping to 275 bps at year 5 and then to 300 bps year 6 to maturity. ICBC contributed $23.75 million USD to the $450 million USD term loan tranche. Record ID#105812 captures ICBC's contribution. In addition to ICBC, the following lenders contributed to the loan syndicate: Bank United ($20.00 million USD), CoBank ($25.00 million USD), Crédit Agricole Group ($23.75 million USD), E.Sun Financial Holdings ($20.00 million USD), East West Bank ($25.00 million USD), FirstBank Puerto Rico ($14.00 million USD), Investec Bank ($82.75 million USD), KEB Hana Bank ($23.75 million USD), Munich Reinsurance Company ($10.00 million USD), National Australia Bank Limited (NAB) ($25.00 million USD), Nomura Holdings Inc. ($23.75 million USD), Regions Bank ($20.00 million USD), Royal Bank of Scotland (RBS) ($20.00 million USD), Shinhan Bank ($8.25 million USD), Siemens Bank GmbH ($25.00 million USD), SPT ($25.00 million USD), SunTrust Bank ($25.00 million USD), and Woori Bank ($10.00 million USD). ICBC contributed $11.56 million USD to the $50 million USD revolver tranche. Record ID#105813 captures ICBC's contribution. In addition to ICBC, the following lenders contributed the respective amounts to the loan syndicate: CoBank ($5.00 million USD), Crédit Agricole ($7.81 million USD), Investec ($7.81 million USD), KEB Hana Bank ($7.81 million USD), NAB ($5.00 million USD), and SunTrust ($5.00 million USD). Crédit Agricole and Investec served as initial coordinating lead arrangers, providing initial commitments of $156.60 million USD and $500.00 million USD respectively. ICBC, KEB Hana Bank, and Nomura were coordinating lead arrangers. The proceeds were used by the borrower to finance its $900 million USD acquisition of the 644 MW Bayonne Energy Center (BEC), a gas and oil-fired power plant constructed in 2012 and expanded in 2018 in Bayonne, Hudson County, New Jersey. BEC distributes power to New York City, New York via a cable that runs from Bayonne beneath New York Harbor to a substation in Brooklyn, New York. BEC sells its output into Zone J of New York Independent System Operator and has contracts for partial output with Direct Energy Business Marketing. In July 2018, Macquarie Infrastructure Corporation (MIC) entered into an agreement to sell 100% of the BEC to NHIP II Bayonne Holdings, LLC for around $656.5 million USD in cash and $243.5 million USD in assumed debt. Subject to approvals from the Federal Energy Regulatory Commission and the State of New York Public Service Commission, the acquisition was due to close in the fourth quarter of 2018. The acquisition was completed on October 15, 2018. On September 30, 2019, financial close was reached on a deal in which a syndicate of five banks — including ICBC — entered into a $565.00 million USD syndicated loan agreement with NHIP II for the 644 MW Bayonne Energy Center (BEC) 2019 Refinancing Project. This loan was a mini-perm loan that carried a maturity period of seven years, a final maturity date of September 30, 2026, and an interest rate based on LIBOR plus an initial margin of 225 bps, stepping up to 250 bps for year 5 and then to 275 bps for year 6 to maturity. The proceeds were to be used by the borrower to refinance the $500 million USD loan used for the acquisition of BEC and for other transaction costs, with the remainder (an estimated $8 million USD) to be used to pay the sponsors a dividend. Each lender, including ICBC, contributed $113.00 million USD to the loan syndicate. Record ID#105814 captures ICBC's contribution.
Staff comments
1. It is plausible, if not likely, that the specific borrowing institution was a special purpose vehicle subsidiary of North Haven Infrastructure Partners II L.P., i.e. NHIP II Bayonne Holdings, LLC. This issue merits further investigation. 2. A 6-month LIBOR was assumed. The average six-month LIBOR for November 2018 was 2.86411%. Therefore, the interest rate has been coded as 2.86411% + 2.50% = 5.36411%.