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Overview

Bank of China contributes to $646.98 million syndicated loan for Waha–Presidio Natural Gas Pipeline project in Texas

Commitments (Constant USD, 2023)$96,668,730
Commitment Year•2015Country of Activity•MexicoDirect Recipient Country of Incorporation•United StatesSector•Industry, Mining, ConstructionFlow Type•Loan

Status

Project lifecycle

Completion

Pipeline: PledgePipeline: CommitmentImplementationCompletion

Timeline

Key dates

Commitment date
Nov 17, 2015
Start (actual)
Sep 1, 2016
End (planned)
Mar 31, 2017
End (actual)
Mar 31, 2017
Last repayment (originally scheduled)
Feb 29, 2036

Stakeholders

Organizations involved in projects and activities supported by financial and in-kind transfers from Chinese government and state-owned entities

Ultimate beneficial owners

At least 25% host country ownership

Funding agencies

State-owned Commercial Banks

  • Bank of China (BOC)

Cofinancing agencies

Private Sector

  • Banco Bilbao Vizcaya Argentaria, S.A. (BBVA)
  • Banco de Sabadell, S.A.
  • CaixaBank, S.A. (Formerly Criteria CaixaCorp)
  • ING Group N.V.
  • Intesa Sanpaolo S.P.A. (formerly Cariplo/Banca Intesa/BCI)
  • Mizuho Bank, Ltd.
  • MUFG Bank, Ltd. (Formerly Bank of Tokyo-Mitsubishi UFJ, Ltd. (BTMU))
  • Sumitomo Mitsui Banking Corporation (SMBC)

Receiving agencies

Joint Venture/Special Purpose Vehicles

  • Trans-Pecos Pipeline, LLC

Loan description

Bank of China contribution to USD $646.98 million syndicated loan for Waha–Presidio Natural Gas Pipeline project in Texas and Mexico in 2015

Grant element•40.6788%Interest rate (t₀)•2.60175%Interest type•Variable Interest RateLoan tenor•6-month rateMaturity•20.3 years

Narrative

Full Description

Project narrative

In January 2015, the Federal Electricity Commission (CFE, Comisión Federal de Electricidad) granted Carso Energy a contract for the provision of gas transportation services through the Waha-Presidio natural gas pipeline and Waha-San Elizario natural gas pipeline, both located in the state of Texas, in the United States of America. Then, on November 17, 2015, Trans-Pecos Pipeline, LLC — a special purpose vehicle and joint venture of Carso Energy Corp. (51% equity stake), MasTec TPP, LLC (33% equity stake) and Energy Transfer Mexicana, LLC (16% equity stake) — signed a $646.98 million syndicated debt financing package with a group of lenders for the Waha-Presidio Natural Gas Pipeline PPP Project. The members of the syndicate reportedly included Bank of China, Bank of Tokyo, BBVA, Mizuho Bank, Sumitomo Mitsui Banking Corporation, Caixabank, ING Group, Intesa San Paolo, and Banco de Sabadell. The package consisted of a $564.2 million term loan and a $82.7 million letter of credit. The debt had a tenor of construction plus 18 years. The interest rate for the term loan is LIBOR plus a variable margin, starting at 200 bps and going up to 275 bps by the end of the repayment period. The purpose of the project was to develop the Waha-San Presidio Natural Gas Pipeline, a 230 km natural gas transportation pipeline running from Fort Stockton, Texas, to Presidio, Texas, and under the Rio Grande to Ojinaga, Mexico, where it connects with the Ojinaga-El Encino Gas Pipeline. Energy Transfer Mexicana, LLC applied for its FERC permit in May 2015, received a favorable Environmental Assessment in January 2016, and received final FERC approval to build the pipeline in May 2016. It then applied for the necessary state T-4 permit from the RRC in January 2015 and received the permit in April 2015. A request by the Big Bend Conservation Alliance (BBCA) for a rehearing with FERC was denied in November 2016. Construction began in September 2016, and the pipeline went into service on March 31, 2017.

Staff comments

1. Lummus Consultants International was a technical adviser to the lenders, Milbank, Tweed, Hadley & McCloy was their legal adviser. Shearman & Sterling acted as legal adviser to the sponsor. 2. AidData has coded the interest rate based on the (assumed 6-month) LIBOR rate on the date the loan was signed (November 17, 2015) plus the 200 bps margin to accurately capture the interest rate at T0. 3. One source indicates the Korea Development Bank participated in the syndicate and Bank of China did not. This issue warrants further investigation.