Narrative
Full Description
Project narrative
On March 29, 2018, financial close was reached on a deal in which a syndicate of 11 banks — including the Bank of China (BOC) — entered into a $1.7 billion AUD ($1,287.59 million USD) syndicated loan agreement with SDP Finco Pty Ltd. — a special purpose vehicle (SPV) jointly owned by the Ontario Teachers’ Pension Plan (50% equity stake), the Utilities Trust of Australia (UTA) (33.3% equity stake), and The Infrastructure Fund (TIF) (16.7% equity stake) — for the Sydney Desalination Plant (SDP) 2018 Refinancing Project. The syndicated loan consisted of several tranches, including a $500 million AUD ($383.5 million USD) 'samurai' tranche, with portions denominated in Australian and U.S. dollars, that carried a maturity period of 11 years, an interest rate of BBSY plus 170 basis points (bps) for the AUD portion, an interest rate of LIBOR plus 125 bps for the USD portion, and was senior secured. MUFG Bank, Ltd. acted as the sole mandated lead arranger, underwriter, bookrunner, swap provider, and facility agent for this tranche. The proceeds of this loan were used to refinance the debt of the Sydney Desalination Plant (SDP). Bank of China contributed $89.6 million USD to the syndicated loan. Record ID#94551 captures BOC's contribution. Then, on June 16, 2020, financial close was reached on a deal in which a syndicate of nine banks — including BOC — entered into a $313.95 million AUD ($218.23 million USD) syndicated loan agreement with SDP Finco Pty Ltd. — now owned by the Ontario Teachers’ Pension Plan (60% equity stake), the Utilities Trust of Australia (UTA) (40% equity stake) — for the Sydney Desalination Plant (SDP) 2020 Refinancing Project. The syndicated loan was divided into two tranches: a $263.95 million AUD ($183.47 million USD) term loan with a tenor (maturity) of one year and eight months (1.66 years) and a final maturity date of February 28, 2022 and a $50.00 million AUD ($34.76 million USD) term loan with a tenor (maturity) of one year and eight months (1.66 years) and a final maturity date of February 28, 2022. The proceeds of this loan were used to refinance the existing debt of the SDP BOC contributed $26.64 million AUD ($18.51 million USD) to the $263.95 million AUD term loan tranche. In addition to BOC, the following lenders contributed the respective amounts to the term loan tranche: Westpac Banking Corporation ($26.64 million AUD), Commonwealth Bank of Australia (CBA) ($26.64 million AUD), Export Development Canada (EDC) ($26.64 million AUD), National Australia Bank Limited (NAB) ($26.64 million AUD), Norinchukin Bank (Nochu Bank) ($26.64 million AUD), Royal Bank of Canada (RBC) ($26.64 million AUD), Sumitomo Mitsui Banking Corporation ($35.00 million AUD; $24.33 million USD), and Australia and New Zealand Banking Group (ANZ) ($42.50 million AUD; $29.54 million USD). Record ID#94554 captures BOC's $26.64 million AUD contribution. BOC contributed $4.29 million AUD ($2.98 million USD) to the $50 million AUD working capital tranche. In addition to BOC, the following lenders contributed the respective amounts to the term loan tranche: Westpac ($4.29 million AUD), CBA ($4.29 million AUD), EDC ($4.29 million AUD), NAB ($4.29 million AUD), Nochu Bank ($4.29 million AUD), RBC ($4.29 million AUD), and ANZ ($20.00 million AUD; $13.90 million USD). Record ID#94555 captures BOC's $4.29 million AUD contribution. Then, on November 30, 2021, financial close was reached on a deal in which a syndicate of 14 banks — including BOC — entered into a $685 million AUD ($489.23 million USD) syndicated loan agreement with SDP Finco Pty Ltd. for the Sydney Desalination Plant (SDP) 2021 Refinancing Project. This syndicated loan was split into two tranches: a $386.00 million AUD ($275.68 million USD) tranche with a maturity period of three years and an interest rate of BBSY plus a margin of 60 basis points (bps) and a $299.00 million AUD ($213.55 million USD) tranche with a maturity period of six years and two months (6.166 years), a final maturity date of January 31, 2028, and an interest rate of BBSY plus a margin of 90 bps. The proceeds of this loan were used to refinance the outstanding debt of the SDP. BOC contributed $28.20 million AUD ($20.14 million USD) to the $386 million AUD term loan tranche. BOC contributed $21.80 million AUD ($15.57 million USD) to the $299 million AUD term loan tranche. Record ID#94557 captures BOC's $28.20 million AUD contribution. Record ID#94558 captures BOC's $21.80 million AUD contribution. The SDP is a large-scale reverse osmosis desalination plant located on a 45-hecatre site in Kurnell, New South Wales, 25 kilometers from Sydney's Central Business District capable of converting seawater into potable water. When needed, the plant to supply an average of 250 million liters of daily drinking water for up to 1.5 million water.
Staff comments
1. Construction of the SDP was completed in 2010. 2. SDP is a regulated asset and that, in 2018 owned by: Ontario Teachers’ Pension Plan – 50%; Utilities Trust of Australia (UTA) – 33.3%; and The Infrastructure Fund (TIF) – 16.7%. The Government of New South Wales privatized the plant and pipeline for $2.3 billion AUD in 2012, signing up to a 50-year lease, backed by a 50-year water supply contract with Sydney Water Corporation (see "Samurai loans – new master for Ronin lenders"). Later, in 2020, the Ontario Teachers' Pension Plan and Morrison & Co, on behalf of UTA, acquired TIF's ownership stake in SDP. Its new equity pattern was as follows: Ontario Teachers’ Pension Plan – 60%; UTA – 40% (see "Ontario Teachers' and Morrison & Co increase ownership stakes in the Sydney Desalination Plant").