‘The banks have until the end of June to bid, and we are expecting to have a lead arranging group formed very quickly after that,’ says a Societe Generalebanker. The French bank was given the financial advisory mandate for the deal in January (MEED 18:1:02). ‘This is going to be a straightforward, pre-paid refinancing fully underwritten by the lead arrangers.’
Although a sizeable payment was made on the original facility in May – the outstandings have fallen to about $240 million – a full $300 million debt package is being sought (MEED 26:4:02). Tenor on the new facility is expected to be eight and a half years and there will be a considerable loosening of the terms and conditions.
‘This is close to being the replacement of a tightly structured project finance deal with a corporate borrowing,’ says a banker looking at the transaction. ‘The assumption is that the deal will be syndicated later, but there is a possibility that if they can put together a large and strong lead group it might end up being a glorified club deal.’
Banks have been asked to bid on a sole basis, rather than as groups.
The original package had two tranches: a $140 million, 12-year commercial facility, and a $210 million, Canadian export-credit-backed, 10-year package. The lead arrangers were Bankers Trust International, now part of Deutsche Bank, Banque Paribas, now part of BNP Paribas, Canada’s Export Development Corporation, Sumitomo Bank, Bank of Taiwan, Chinatrust Commercial Bank, First Commercial Bank and Gulf International Bank (MEED 19:12:97).
Unusually for a regional project finance deal, but reflecting the shareholder structure of Qafac, Taiwanese banks have been invited to participate in the transaction.