Following a long delay that stretches back to 2000, the official mandate for the US$1 billion 16 year project financing for BLCP Power has finally been awarded. The deal is split between a US$500m offshore portion and a US$500m Baht equivalent onshore tranche and may also include some support from the Japan Bank for International Cooperation (JBIC) or the Asian Development Bank (ADB).
Arrangers formally appointed for the offshore loan comprise ANZ Investment Bank, BNP Paribas, Credit Lyonnais, Fortis Bank, KBC Bank, NordLB, SG Asia, Sumitomo Mitsui Banking Corp and WestLB. The banks group for the onshore segment is yet to be finalised, but according to officials close to the deal it will include many of the major Thai banks.
The facility will finance the development of the 1,250MW Map Ta Phut coal-fired power station in Rayong Province, Thailand at a total cost of US$1.2 billion. The remaining $200m will be provided in equity by sponsors Banpu of Thailand and Hong Kong based China Light & Power International (CLP). Powergen was originally a sponsor but following CLP's acquisition of its generating assets the equity structure was changed leaving Banpu and CLP holding 50% apiece.
The sponsors are actively seeking a further foreign partner to take a 30% stake in the project in which case the current sponsors will reduce their shareholding to 35% each. Bankers looking at the deal have commented on the size of the transaction when compared to other Thai project financings.
This is the largest since Ratchaburi Electricity Generating Co's BHT44 billion (US$1 billion) 13 year facility completed in October 2000. That loan was funded purely in Baht with a mixture of two foreign and six domestic banks acting as arrangers achieving a sell down of just under 15% from nine local banks.
Pricing was identical across all four tranches with participants receiving a margin of Marginal Lending Rate (MLR) flat and a top tier front end fee of 110bp for BHT4 billion tickets (US$92 million).
Market observers point out that there are few recent facilities to draw comparisons against, with the only other project financing to be completed in Thailand this year being the $130 million 12 year deal for Gulf Electric. This transaction was split between a BHT1.8 billion (US$42 million) portion priced at 50bp under MLR for the first three years, stepping up to MLR flat thereafter and a US$88m tranche paying 300bp over Libor.
The relatively small scale of the deal meant that arranger Industrial Bank of Thailand only required a handful of banks to sign up to fill the book. Following a six month long syndication process four domestic institutions joined the transaction.
Some loan syndicators have suggested that while the nine strong offshore banks will be able to raise the required $500 million they have voiced concerns about the appetite in the domestic market for this amount. Bankers close to the deal have dismissed such fears highlighting, among others, the success of the domestically syndicated BHT18.2 billion (US$420 million) fundraising secured by TA Orange in February last year.
A further potential stumbling block could be the exact nature of the involvement from either JBIC or ADB, which is yet to be determined although sources report that some form of political risk insurance will be provided. Bankers are rumoured to be waiting to discover the full extent of their commitment as the minimal contribution may deter them from joining the transaction.
The offshore banks are working towards a launch date some time at the end of June by which time a mandate will be in place for the onshore portion of the deal.