Deal: King & Wood Mallesons (KWM) has advised WestConnex on the negotiation of $4.2 billion of new non-recourse debt.

Allens advised the lenders on WestConnex’s $4.2 billion refinancing, which reached financial close on 18 December 2020. 

Value: $4.2 billion.

Area:  Banking and finance.

Key players: The KWM team advising WestConnex was led by partner Claire Rogers and supported by senior associates Amy Maguire and Stuart Alexander, and solicitor, Lily Rayment.

The Allens team was led by partner Michael Ryan, senior overseas practitioner Alex Tonkin along with lawyers Lorena Belbruno and Tom Harrison.

Deal significance: The $4.2 billion of new non-recourse debt comprises $3 billion of bank term debt facilities with tenors of three, five and seven years, and a $1.2 billion two-year bridge facility. The interest rate exposure on the term debt facilities will be fully hedged.

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Along with refinancing WestConnex’s debt in respect of its M4 Asset, the refinancing restructures the previous debt structure by introducing a group funding platform to which other WestConnex assets could be added in future.

“It was a privilege to advise what was a very large group of lenders on this novel refinancing structure, which will streamline existing debt to provide WestConnex and its Sponsors with a more versatile funding platform for the future,” Mr Ryan said.

“The outcome is a credit to WestConnex and its Sponsors and it is a testament to the enduring strength of the Australian project finance market that such a large and complicated refinancing process could be achieved so efficiently notwithstanding the impact of COVID-19.”

The proceeds of the financing will be used to refinance $4.0 billion of existing bank debt facilities established at the time of Sydney Transport Partners’ acquisition of its 51 per cent equity stake of WestConnex in 2018, as well as funding associated transaction costs.

“It is rewarding to bring together a financing package that delivers a substantial reduction in WCX’s financing costs,” Ms Rogers added.

“The strong market response to this opportunity is a sign of the WestConnex businesses’ strength and is also a positive indicator of lender confidence moving into 2021.”