LONDON, 30 May 2008 – International law firm Milbank, Tweed, Hadley & McCloy LLP has advised all of the lenders in the US$2.8 billion financing of the new Yemen LNG plant and associated infrastructure, representing the largest ever limited recourse financing of a project in Yemen. The project’s sponsors include TOTAL, Hunt Oil, Yemen Gas, SKCorp, Hyundai, KOGAS and GASSP. The financing involves a wide range of commercial banks and international financing institutions, including French, Korean and Japanese export credit agencies.
The loan facilities include US$1.7 billion in senior limited recourse project finance facilities. These consist of a term loan facility, a loan facility benefiting from a comprehensive COFACE guarantee, a loan facility benefiting from a comprehensive NEXI guarantee and a loan facility benefiting from a comprehensive K-EXIM guarantee, each provided by The Bank of Tokyo-Mitsubishi UFJ, Ltd., BNP Paribas, Citigroup, ING Bank N.V., The Royal Bank of Scotland plc, Société Générale and Sumitomo Mitsui Banking Corporation as Yemen LNG Facilities Initial Mandated Lead Arrangers. In addition, the project received direct loans from K-Exim and JBIC.
The financing also includes a US$1.1 billion, multi-tranche TOTAL sponsor loan facility that benefits from a guarantee from TOTAL and is funded by The Bank of Tokyo-Mitsubishi UFJ, Ltd., BNP Paribas, Citigroup, CALYON, ING Bank N.V., The Royal Bank of Scotland plc, Société Générale and Sumitomo Mitsui Banking Corporation as TOTAL Facility Initial Mandated Lead Arrangers.
The Milbank team included London-based partners Phill Fletcher, John Dewar and Cathy Marsh, European Counsel Patrick Holmes and associates Alison Smith, Madeleine Welham, Fiona Gulliford and Asha Dhand. The team also encompassed Tokyo-based associate Jeffrey Rector. Local legal advice on the transaction was provided to the lenders by Alwazir Consultants.
Phill Fletcher commented, “This first-in-country transaction, funded in the midst of the credit crunch, is evidence that well structured projects can access the financial markets. The deal molded a complex set of financing arrangements, and yet closed two months after the commercial bank lead arrangers were mandated.”
Citigroup acted as financial advisor and Sullivan & Cromwell LLP as legal advisor to the borrower.
Milbank’s Project Finance team has recently won the ‘Chambers and Partners – Global Projects & Energy Law Firm of the Year’ for the second year running. Milbank was also recently recognised as the ‘European, Middle East and Africa Project Finance Team of the Year’ by the International Financial Law Review. Milbank has been designated as among the 1st Tier of project finance practices in London and globally by Chambers & Partners Directory.
Milbank, Tweed, Hadley & McCloy LLP is a 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 and transactions, 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 Los Angeles, Washington, DC, London, Frankfurt, Munich, Tokyo, Hong Kong, Singapore and Beijing.