Milbank Represents Lenders in Financing of Liquefied Natural Gas Project in Mexico
Consortium Closes US$680 Million Financing for Manzanillo LNG Facility
NEW YORK, October 1, 2009 – A consortium comprised of Mitsui & Co. Ltd., Samsung C&T Corporation and Korean Gas Corporation has closed a US$680 million project financing for the Manzanillo LNG facility, a liquefied natural gas regasification terminal on the Pacific coast in Manzanillo, Colima State, Mexico. The international law firm Milbank, Tweed, Hadley & McCloy LLP, led by New York-based partner Dan Bartfeld, represented the lenders, including Export-Import Bank of Korea (“KEXIM”) and seven commercial banks, in structuring, negotiating and closing the financing. The total cost of the project is US$875 million. The commercial banks were Mizuho, Calyon, BTMU, SMBC, BBVA, Standard Chartered Bank and Development Bank of Japan.
The transaction represents the largest ever joint Japanese-Korean development of an energy project in Latin America, and will significantly increase the Mexican gas infrastructure for future power projects. “The successful financing of the Manzanillo project illustrates that well structured projects developed by top international companies can still mobilize capital even in this difficult environment," noted Milbank's Bartfeld.
In addition to Mr. Bartfeld, the Milbank team included New York-based senior associate Daniel Michalchuk and associates Dima Petherbridge and Douglas Kim.
About the Transaction
The Manzanillo LNG facility will consist of two 150,000 cubic meter LNG receiving tanks, a re-gasification plant and a jetty, and will provide up to 14.1584 million cubic meters per day of natural gas. The terminal is expected to be operational by the end of 2011 and is being constructed by a subsidiary of Samsung Engineering Co. Ltd. The jetty is being constructed by TOA Corporation, Mexico Branch. The US$680.7 million debt facility for the project includes a US$262.1 million direct loan by KEXIM; a US$214.4 million tranche supported by a KEXIM guarantee; and a US$204.2 million uncovered tranche. The seven commercial banks which provided commitments under the financing were BBVA, Bank of Tokyo Mitsubishi UFJ, Calyon, Development Bank of Japan, Mizuho, SMBC and Standard Chartered Bank. The facility has a 20 year service agreement for the storage and regasification of LNG with Mexico's Comisión Federal de Electricidad (CFE).
About Milbank
Milbank, Tweed, Hadley & McCloy LLP is a preeminent global law firm that for more than 140 years has provided innovative legal solutions in many of the world’s largest, most complex, “first-ever” corporate transactions and litigation. Our transactional expertise includes capital markets, corporate finance, project finance, acquisition finance, and other major fields of law practice. Milbank litigation and arbitration teams resolve disputes involving mergers and acquisitions, proxy battles, financings and securities offerings, intellectual property, white collar crime, and corporate restructurings, among others. Our clients range from prominent multinational financial, industrial and commercial enterprises to governments, institutions and individuals. The Firm is headquartered in New York with offices in Beijing, Frankfurt, Hong Kong, London, Los Angeles, Munich, Singapore, Tokyo, and Washington, DC.