Firms: King & Wood Mallesons (Australian counsel to Barclays); Corrs Chambers Westgarth (Apollo); Herbert Smith Freehills (Leighton Holdings, now known as CIMIC); Cahill (US counsel to Barclays); Paul Weiss (US counsel for Apollo).
Deal: The A$900 million financing of a joint venture between Australia’s Leighton Holdings (now known as CIMIC) and US private equity firm Apollo Global Management.
Value: A$900 million, including a seven-year senior secured Term Loan B (TLB) facility split into a US$350 million tranche and a A$359 million tranche, together with an A$100 million revolver with a five-year term.
Key players: KWM, which advised Barclays (lead arranger), was led by banking and finance partner Richard Hayes (pictured), assisted by senior associate Alastair Gourlay and lawyer John Arthur. The banking and finance team was assisted by corporate partner Lee Horan and tax partner Scott Heezen.
Partners from Corrs and HSF also acted on the deal.
Deal significance: The deal is the first Australian dollar-denominated TLB financing. The joint venture company and borrower, LS Newco, was spun out of Leightons earlier this year and provides services to telecom, infrastructure, environment and energy distribution and transmission sectors, principally in Australia.
Investors included Australian superannuation funds and debt funds.
Commenting on the deal, KWM partner, Richard Hayes, said: “The success of the deal can be attributed, at least in part, to the growing pool of superannuation funds and other investors looking for attractive, risk-adjusted returns and the ongoing disintermediation of the financial markets in Australia.”
“It is great news for the market that Australian borrowers and the portfolio companies of domestic and international private equity firms can now access an AUD TLB market without having to incur the cost of expensive AUD-USD cross-currency swaps.
“We anticipate that this may become the new financing solution of choice for many, particularly when compared with the quarterly maintenance covenant regime typically imposed by the traditional Australian bank debt market.”