Legal deals of the week (May 29, 2019)

Ashurst advises on financing of Shuqaiq 3 IWP; CC and AS&H advises on STC’s international debt capital markets issuance; Dentons advises on first green corporate sukuk issuance in the ME and DWF advises Neutral Capital Finance PLC on USD50m green Eurobond programme.

Ashurst advises on financing of Shuqaiq 3 IWP

Ashurst has advised a consortium of lenders consisting of MUFG, SMBC, Samba Financial Group, Crédit Agricole Corporate and Investment Bank, The National Commercial Bank and The Norinchukin Bank on the successful closing of the Shuqaiq 3 IWP in Saudi Arabia, which reached financial close on May 8, 2019.

The 450,000 cm/d independent water project in Saudi Arabia is to be developed by the Shuqaiq Three Company for Water which is owned by Marubeni Corporation, Acciona Agua, S.A., Abdul Latif Jameel Commercial Development Company Limited and Rawafid Alhadarah Holding Co. The plant’s entire capacity and water output will be sold to the Water and Electricity Company SMLLC  under a 25 year water purchase agreement.  The plant will be built by Acciona Agua, S.A. under a turnkey EPC contract.  The senior facilities are comprised of a USD 450 million commercial facility.

The Ashurst team was led by partner David Charlier, assisted by senior associates Brad Sandford and Claire Cornally and solicitors William Keen and Anas Bhurtun on the finance documents, along with senior associate Grant Batten and associate Joanna Codling on the project documents and subcontracts. Partner Kerion Ball and associate Tom Bragg in London assisted on the hedging arrangements.

Commenting on the deal, David Charlier said, “We are delighted to have advised the local and international lenders supporting the consortium led by Marubeni on the successful closing of this significant project in the Kingdom of Saudi Arabia. There has been a surge of activity in Saudi Arabia since the introduction of Vision 2030 and this has been matched by a new round of water and wastewater projects. It is particularly pleasing to be involved in one of the earliest transactions in this latest round of publicly tendered IWPs to reach financial close.”

Clifford Chance and AS&H advises on STC’s international debt capital markets issuance

Clifford Chance and Abuhimed Alsheikh Alhagbani Law Firm in co-operation with Clifford Chance (AS&H) have advised Saudi Telecom Company (STC) in relation to the establishment of its USD5 billion sukuk programme and its debut international capital markets issuance of USD1.25 billion 10-year fixed rate trust certificate by STC Sukuk Company Limited (the Certificates).

STC is the leading telecommunications operator in Saudi Arabia and is one of the highest value telecom brands in the Middle East. STC provides a wide variety of telecommunications services in Saudi Arabia, including mobile, fixed-line and broadband access products, wholesale, data centre hosting, solutions for office and home environments, cybersecurity and other information and communication technology and related solutions.

This transaction marks STC’s debut foray into the international debt capital markets issuance and is a landmark transaction for STC in terms of diversifying its sources of funding and investor base while gaining access to greater pools of liquidity.

The transaction was highly successful with the orderbook being 3.5 times oversubscribed.

Qudeer Latif (global head of Islamic Finance), who led the Clifford Chance team commented, “We are delighted to have assisted Saudi Telecom Company on their first move into the international debt capital markets and were delighted to see the high demand from the market. Our team passes our congratulations to STC on a successful initial debt issuance.”

The Clifford Chance team comprised Qudeer Latif (partner), John Connolly (partner), Stuart Ure (partner), Ahmed Choudhry (senior associate), Alekhya Prakash (senior associate), Christopher Osborne (senior associate), Kierra Jones (law clerk) and Ismaila Ngum (trainee solicitor). The AS&H team comprised Yasser Al-Hussain (partner), Reema Al-Hamoud (associate), Ali Moiz Ansari (associate) and Sahal Khalawi (associate).

First Abu Dhabi Bank, HSBC, J.P. Morgan, KFH Capital, Samba Capital and Standard Chartered Bank acted as joint lead managers on the issuance.

Dentons advises on first green corporate sukuk issuance in the Middle East

Dentons has advised the managers on the issuance of Majid Al Futtaim’s USD600 million 4.638 per cent Green Trust Certificates due 2029 completed on May 14, 2019. This is the first green sukuk issuance by Majid Al Futtaim which intends to use the proceeds to back environmentally-friendly projects in areas such as renewable energy and sustainable water management. It is also the first corporate green sukuk issuance in the Middle East, and only the second green debt capital markets issuance in the region following the issuance by First Abu Dhabi Bank in 2017.

Abu Dhabi Islamic Bank, Dubai Islamic Bank, Emirates NBD, First Abu Dhabi Bank, Gulf International Bank, HSBC and Standard Chartered Bank acted as managers and book-runners on this issuance.

The green sukuk were issued under Majid Al Futtaim’s USD1.5 billion Trust Certificate programme whereby Dentons also advised the managers on the update of this programme.

Dentons Capital Markets partner Alex Roussos in Dubai commented, “This is a truly landmark transaction for the Majid Al Futtaim and the region as a whole. It is yet another example of the company blazing a trail in the Middle East for others to follow. Issuers in our region are starting to actively look into green and sustainable finance opportunities and this transaction will help the market realise that it is an area of finance that we can and must grow and support in the coming years. The success of the issuance is a result of all the hard work the company and the managers put into making the necessary adjustments to the programme documentation, putting together the company’s green finance framework and procuring the second party opinion and ESG rating, all within a very tight timeframe.”

The Dentons team was led by Alex Roussos with assistance from legal consultant Katie Phillips and trainee Niharika Khimji.

DWF advises Neutral Capital Finance PLC on USD50m green Eurobond programme

DWF’s Debt Capital Markets team has advised Neutral Capital Finance PLC in its capacity as issuer of a green USD50m medium term note Eurobond programme.

The first 2019 series of Bonds for an amount of USD12m was issued by Neutral Capital Finance plc on April 12, 2019.  The programme is listed on the Frankfurt exchange with a rating of A-(sf) (ind) from ARC Ratings.

The Bonds will fund Neutral Fuels LLC’s expansion plans in the UAE and other appropriate jurisdictions in the Middle East, Asia and Africa and to build and operate a number of modular-based biodiesel production plants.  Neutral Fuels converts waste cooking oils and fats into European standard EN14214 compliant biofuel.

The DWF team was led by partner, Martin Pugsley, alongside Michael Byrne, Sophie Morris, Laurie Clay and Ade Olunowo in the London office and Umera Ali and Katrina Mackay in the Banking team from the firm’s Dubai office.

Martin Pugsley, head of financial services at DWF said, “We are pleased to advise Neutral Capital Finance on this significant green bond issue, which will open up lines of funding to Neutral Fuels to expand its growth of biodiesel production across the UAE and the Gulf. This transaction perfectly demonstrates our global debt capital markets credentials and specific expertise in the Financial Services sector.”

Thomas Lloyd-Jones, CEO of Zenzic Partners, who acted as arranger said, “We are pleased to have arranged the Neutral Capital Finance Plc transaction. The security of the structure focuses on the key strength of renewable energy companies, as a sector: the durable assets and long-term asset cash-flows generated by the installations, in this case operated by Neutral Fuels LLC; an extremely experienced operator in the sector.”


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