ICBC contributes to a $1.77 billion AUD syndicated loan for the Footscray Hospital PPP Project (Linked to Record ID#94403 and #94404)

Project narrative

On March 11, 2021, financial close was reached on Footscray Hospital Public-Private Partnership (PPP) Project. As part of the financing, a syndicate of 14 banks — including the Bank of China (BOC), the Bank of Communications (BoComm), and the Industrial and Commercial Bank of China (ICBC) — entered into a $1.77 billion AUD ($1.36 billion USD) syndicated loan agreement with Plenary Health (NFH) Finance Pty Ltd. — a special purpose vehicle (SPV) affiliated with another SPV, Plenary Health (NFH) Pty Ltd, which is itself owned by Plenary Investments (NFH) Pty Ltd (70%), a vehicle for the Plenary Group, and Sojitz Healthcare Australia Pty Ltd (30%), which is owned Japanese trading house Sojitz Corporation, and that is contracted by the State Government of Victoria for the financing, design, construction, and maintenance of the Footscray Hospital for 25 years — for the Footscray Hospital PPP Project. Plenary Health (NFH) Finance Pty Ltd. would then on-lend the funds from the lenders to Plenary Health (NFH) Pty Ltd. The debt carried a tenor (maturity period) of seven years. The debt included two tranches, one to be paid by the State Government of Victoria's $573 million AUD capital contribution at the commissioning and another base tranche that would convert to a term loan after construction. This loan was secured by (i.e. collateralized against) a Security Trust Deed from Plenary Health (NFH) Pty Ltd. National Australia Bank Limited (NAB) served as the security trustee. Record ID#94403 captures BOC's contribution to this syndicated loan. Record ID#94404 captures BoComm's contribution. Record ID#94405 captures ICBC's contribution. In addition to the three Chinese state-owned banks, the following lenders contributed to the syndicate: Mizuho Bank, NAB, Westpac Banking Corporation, Crédit Industriel et Commercial (CIC), Nippon Life Insurance Company, Norinchukin Bank (Nochu Bank), Intesa Sanpaolo S.p.A., Norddeutsche Landesbank Girozentrale (NORD/LB), Norinchukin Australia Pty Limited, Standard Chartered Bank PLC, and Sumitomo Mitsui Trust Bank, Limited (SMTB). Mizuho, NAB, and Wespac served as mandated lead arrangers, underwriters, and bookrunners. CIC, Nippon Life, and Nochu Bank were additional mandated lead arrangers. The other lenders joined in syndication. NAB, in addition to serving as security trustee, served facility agent. The State Government of Victoria agreed to provide up to $1.5 billion AUD for this project. The Footscray Hospital PPP Project sought to construct a hospital in Melbourne, Victoria with a capacity of 508 beds and 608 beds, with room for expansion of additional 86 points of car, and 1,224 carparks on an approximately four hectare triangular project site located on the western corner of the intersection of Geelong and Ballarat Roads in Footscray, bordered by Geelong Road to the southeast, Ballarat Road to the north, Federal Street to the southwest, and Tiernan Street in the north, all about one kilometer from the Footscray Railway Station and about nine kilometers from Melbourne's Central Business Distract and within the Footscray Metropolitan Activity Center. The project site, in addition to the hospital building, included gardens and external infrastructure in form of utilities and roadworks infrastructure external to the project site. It also included 5,000 square meters of dedicated Victoria University (VU) research and education space and a public-use pedestrian footbridge spanning Ballarat Road connecting the project site to VU's Footscray Park Campus, which was funded by VU. In addition to the VU space and the main hospital buildings, a stand-alone facility along the Tiernan Street boundary of the project was to constructed. Commercial opportunities in the main hospital, the Tiernan Street facility, and VU building included facilities for childcare, a gymnasium, a retail pharmacy, a medical clinic, food and beverage outlets, convenience retail, and office space and consulting suits. The project also included the delivery of carpark management services for the Sunshine Hospital Carpark, as the Footscray Hospital would become part of a network of Western Health-operated hospitals, including Sunshine Hospital, that would require regular staff transit between the facilities. The beds were divided into 224 multi-day beds, 96 subacute, 54 critical care, 50 mental health, 36 same-day, 24 emergency department, and 15 drug and alcohol beds. The hospital was capable of caring for an additional 15,000 patients and an another 20,000 people at the emergency department annually. The new Footscray Hospital was intended to replace the existing Footscray Hospital on Gordon Street, which was built in the 1950s. This project was the largest ever health infrastructure investment in the State of Victoria. The initial attempts for the procurement and financing of this project intersected with the outbreak of the COVID-19 pandemic, with the final bids put on hold for two months when Victoria locked down. During another lockdown, in October 2020, Victoria named Plenary Health as its preferred bidder. Negotiations included novel scenarios including risk shares, claims in case of lockdowns, and the inclusion of additional airborne disease outbreak systems. On March 10, 2021, the State Government of Victoria entered into the PPP contract with Plenary Health. Per the contract, technical acceptance was to fall on or before June 11, 2015, with commercial acceptance coming on or before September 9, 2025, and operational phase falling on or before September 10, 2015, with the contract expiring September 9, 2025. Multiplex Constructions Pty Ltd. was the Design and Construction (D&C) contractor responsible for design and construction. Compass Group Healthcare Hospitality Services Pty Ltd and Honeywell Ltd. served as the service contractors for facility management services. Wilson Parking Australia 1992 Pty Ltd. was contracted to provide car park services to the hospital. Victorian Health Building Authority (VHBA) was responsible for overseeing all aspects of the project. Western Health, the future operator and provider of clinical hospitals at the hospital, was also heavily involved in overseeing the project. Cox Architecture and Billard Leece Partnership were responsible for the design of the hospital. Waterman served as the technical advisor for the State Government of Victoria, overseeing construction phases services on behalf of it and Western Health. Plenary contracted Slattery to provide cost planning and auditing advice to assist with the proposals. Hills Health Solutions won a $7 million AUD ($4.7 million USD) contract to supply and install its Nurse Call platform for the hospital. Stantec served as building services engineer for the project, providing mechanical, electrical, communications, hydraulics, fire protection, fire engineering, acoustics, specialty lighting, and vertical transportation services for the Plenary Consortium. Construction began in March 2021.