New York: Leading worldwide legislation agency Clifford Chance suggested 4 Panamanian subsidiaries (the Operating Companies) of The AES Corporation, a US Fortune 500 energy firm, on the refinancing of an combination US$1.485 billion in current debt and capital expenditures. The transaction, which closed on Friday, August 14, intertwined the creation of a Panamanian finance affiliate (the Finance Company), to subject US$1.38 billion price of 10-year notes at 4.375% (the Notes) and procure a US$105 million three-year loan (the Loan Facility), and a US$50 million revolving credit score facility (the Liquidity Facility). This is the biggest bond issuance made by non-public entity in Panama and the larger Central American and Caribbean area.
The proceeds of the Notes and the Loan Facility had been utilized to refinance current debt and fund capital expenditures for the event of renewable power initiatives, allowing AES’s subsidiaries in Panama to execute their technique of offering clean and inexpensive power options. Payments from the Operating Companies to the Finance Company shall be utilized to make funds under the Notes, the Loan Facility and, if relevant, the Liquidity Facility.
This landmark transaction options various credit-enhancing mechanisms. First, the Liquidity Facility offers liquidity assist to the Finance Company within the occasion of delays or shortfalls in fee from the Operating Companies, offering a layer of safety to holders of the Notes and lenders under the Loan Facility. In addition, the Notes are secured, amongst different issues, by AES’s fairness interest in every of the Operating Companies and the dividends payable to AES by the Operating Companies. If there’s a shortfall in funds from the Operating Companies to the Finance Company, sure dividends payable by the Operating Companies to AES could be utilized to make funds on the Notes and the Loan Facility.
The channeling of refinancing debt by means of a finance affiliate, the Liquidity Facility and the collateral package deal, present credit score assist and allow the Notes to realize a extra beneficial credit standing and allowed the Operating Companies to borrow at an funding grade charge, considerably lowering their debt expense.
The cross-practice, cross-office Clifford Chance group was led by New York Capital Markets associate Jon Zonis and in addition included:
- New York: companions Avrohom Gelber (Tax), Paul Koppel (ERISA) and associates Mariana Estévez (Capital Markets), Jaime Turcios, Dan Borchert (Tax), Atul Jain (ERISA), and legislation clerk Matthew Cramer;
- Washington, DC: associate Fabricio Longhin and associates Jessica Springsteen, Greg Jehle, Pablo Fekete (Banking & Finance);
- Amsterdam: associate Ilse van Gasteren, associates Amin Tamaddoni and Hugo Van Der Molen (Banking & Finance), and transactional assist lawyer Shaun Campbell.