Narrative
Full Description
Project narrative
On July 9, 2019, financial close was reached on a deal in which a syndicate of 29 lenders — including the Bank of China (BOC) and the Industrial and Commercial Bank of China (ICBC) — entered into a £1.96 billion GBP ($2.21 billion USD) syndicated loan agreement with Beatrice Offshore Windfarm Ltd. (BOWL) — a special purpose vehicle (SPV) for the Beatrice Offshore Windfarm owned by SSE Renewables (40%), Copenhagen Infrastructure Partners (35%) and Red Rock Power (25%), which is owned by Chinese state-owned company State Development & Investment Corporation (SDIC) — for the 588 MW Beatrice Offshore Windfarm Refinancing Project. This loan carried an interest rate based on LIBOR plus a margin of 130 basis points (bps) with a step up to a margin of 145 bps after five years and then a final step to 160 basis bps after 10 years. The refinancing raised the project's total debt to £2.45 billion GBP. The refinancing allowed the project's sponsors to slash debt pricing, to change the gearing from 81.6:18.4 to 4.2:5.8, and release £500 million GBP ($627 million USD) in equity. Because the Contract for Difference (CfD) tariff supporting the project had not changed, the tenor (maturity) remained 15 years. Record ID#89514 captures BOC's contribution. Record ID#92424 captures ICBC's contribution. In addition to BOC and ICBC, the following lenders participated: Allied Irish Banks, p.l.c. (AIB), BNP Paribas S.A., CaixaBank, Crédit Agricole, HSBC, Landesbank Baden-Württemberg (LBBW), Korea Development Bank (KDB Bank), KEB Hana Bank, Lloyds Bank, MUFG Bank, Ltd., Sumitomo Mitsui Banking Corporation Group (SMBC Group), Banco Santander, S.A., Sumitomo Mitsui Trust Bank, Limited (SMTB), Société Générale S.A. (SocGen), and Siemens Bank GmbH. There were 29 lenders in total and 24 hedging banks, with the commitments varying between lenders (and some commitments of lenders on the original deal scaled back); most of the debt came from commercial banks, although there was also an institutional investor tranche. The majority of the original project debt lenders participated in the refinancing. In July 2018, the London Branch of ICBC listed on the London Stock Exchange a three-year green bond, in a $1 billion USD tranche and €500 million EUR ($578 million USD) tranche respectively, to, in part, raise the funds for this project. The original 15-year syndicated loan facility backing the £2.6 billion GBP project reached financial closure closed in May 2016. The lenders on that facility were BNP Paribas, Caixabank, Commonwealth Bank of Australia (CBA), European Investment Bank (EIB), ING, KfW, Lloyds, MUFG, Natixis, the Royal Bank of Scotland (RBS), Banco Santander (financial advisor), Siemens Bank, SMBC, and SocGen. The wind farm reached full operation in May 2019. Pricing on the original debt came in at 200 to 210 basis points, stepping up as soon as construction completed (May 2019). Located 13 kilometers off the Caithness coast in Scotland, Beatrice Offshore Windfarm is fourth largest offshore wind farm in the United Kingdom. Its development site covered an area of about 131.5 square kilometers.
Staff comments
1. The individual contributions of the 29 lenders to this £1.96 billion GBP syndicated loan are unknown. For the time being, AidData has estimated the contributions of the London Branch of BOC and ICBC by assuming that the 29 lenders each contributed an equal amount (£67,586,206.8966 GBP) to the loan syndicate. 2. 6-Month LIBOR was assumed. The average 6-Month LIBOR rate for GBP for July 2019 was 0.814%. Therefore, the interest rate has been coded as 0.814% + 1.3% (130 basis points), or 2.114%. 3. There is a dedicated website for the Beatrice Offshore Windfarm: https://www.beatricewind.com/.