Permanent financing repays 2016 bridge loan for 380-mile pipeline between Sonora and Chihuahua
Completing another major Mexico pipeline project financing, Milbank, Tweed, Hadley & McCloy LLP advised international lenders in the $535 million permanent financing for a 380-mile natural gas pipeline running between Samalayuca, Chihuahua and Sásabe, Sonora.
The financing, in which a Milbank Global Project, Energy and Infrastructure Finance team advised BBVA Bancomer S.A., Bank of Tokyo-Mitsubishi UFJ, Ltd., CaixaBank SA, Mizuho Bank Ltd, and Sumitomo Mitsubishi Banking Corp., repays a 2016 bridge loan to the pipeline’s owner, Carso Gasoducto Norte, S.A. de C.V., a subsidiary of Mexico City-based Grupo Carso, S.A.B. de C.V.
The transaction closed on March 10, 2017.
Milbank partners Dan Michalchuk and Dan Bartfeld led the representation of the lenders with associates Alejandra Garcia Garcia, Caylee Hong and Yoon Hyun (Allison) Cho.
The 36-inch pipeline’s carrying capacity of 472 million cubic feet per day will supply Mexico’s state-owned electricity provider Comisión Federal de Electricidad (CFE) with much-needed natural gas.
Mr. Bartfeld said: “As Mexico continues to develop and expand its natural gas transport infrastructure, to the benefit of both Mexican consumers and US natural gas providers, Milbank is gratified to find itself once again the go-to law firm for the financing of gas infrastructure projects.”
“This financing indicates once again that international lenders have confidence in CFE as the anchor offtaker for successful project financings in Mexico and bodes well for future financings to come,” added Mr. Michalchuk.
In the past several years Milbank has advised on billions of dollars of pipeline projects on the US-Mexico border, involving more than 15 financial institutions and many of the leading Mexican and international sponsors and developers. Among the most recent deals are:
- $622 million financing for 280-mile Durango-Aguascalientes conduit in Mexico, developed by Mexico’s leading energy infrastructure company Fermaca;
- $1.1 billion for a pair of pipelines running from the Waha storage hub in Texas to the U.S.-Mexico border (which was also partially sponsored by Carso Energy);
- $353 million for the Nueva Era natural gas conduit connecting sites in southern Texas and Monterrey, Mexico;
- $435 million in financing for a 235-mile pipeline connecting the city of Guadalajara with reception points in the states of Aguascalientes and San Luis Potosí.
