WASHINGTON, DC, June 26, 2008 – The international law firm Milbank, Tweed, Hadley & McCloy LLP, led by Global Project Finance partner Jonathan Maizel, represented the Senior Lenders in the $3.8 billion financing for the construction of the Peru LNG project near Pampa Melchorita, Peru. The financing for the natural gas liquefaction project represents the largest direct foreign investment in Peru’s history and included loans and/or guarantees from the Inter-American Development Bank (IADB), the International Finance Corporation (IFC), The Export-Import Bank of the United States (US Ex-Im Bank), The Export-Import Bank of Korea (K-Exim Bank), and the Italian export credit agency, SACE. In addition, Société Générale and BBVA acted as lead B-loan arrangers for a commercial bank syndicate that included each of the arrangers together with Calyon, Sumitomo, ING, Mizuho and Bank of Tokyo-Mitsubishi. The Sponsor consortium was headed by Hunt Oil Company, and included Repsol YPF, SK Energy and Marubeni.
In addition to the liquefaction facility, the project also includes the construction of a marine loading terminal and a 408 kilometer gas pipeline that will connect the LNG plant to an existing pipeline network operated by Transportadora de Gas del Perú (TGP). The financing, which consists of $2.25 billion in senior secured loans, includes a working capital facility and a local bond tranche which is expected to be completed later this year. First drawdown is anticipated to occur in the third quarter of 2008 and the project is expected to become operational in 2010.
Mr. Maizel noted, “Peru LNG represents one of the premier oil and gas deals in the world this year. By bringing together world-class sponsors and some of the most active and prominent governmental and multilateral lenders, the financing was able to reach financial close in a relatively short time period notwithstanding the current global credit crisis. We anticipate seeing export credit agencies and multilaterals continue to play an increasingly front-and-center role in large international projects as commercial credit markets work themselves out over the foreseeable future.”
In addition to Mr. Maizel, the Milbank team representing the lenders included Leveraged Finance partner Jonathan Green and Global Finance partner David Impastato, as well as Global Project Finance associates Alec Borisoff, Casey Brandt, Joyce Chang, Mark Francini and Alexis Sainz and Global Finance associate Adrian Chiodo. Peruvian legal advice on the transaction was provided to the lenders by Rosselló Abogados.
Société Générale acted as financial advisor and Skadden, Arps, Slate, Meagher & Flom LLP as legal advisor to the borrower and the sponsor consortium.
About Milbank
Milbank, Tweed, Hadley & McCloy LLP is a pre-eminent 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 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.