A consortium including Hastings Funds Management Pty and Ontario Teachers’ Pension Plan is seeking to refinance A$1.64 billion ($1.5 billion) of loans used in 2012 to buy a 50-year lease to a desalination plant in Sydney, according to a person familiar with the matter.
RBC Capital Markets is advising the consortium on the refinancing, the person said today, asking not to be identified because the details are private.
The talks come as Aquasure Pty, builder of Australia’s largest desalination plant, also seeks to refinance about A$3.7 billion of loans backing its project, the company said in July. Borrowing costs for its plant that converts seawater to drinking water in Wonthaggi, near Melbourne, are expected to fall materially from the original greenfield financing signed in 2009, people familiar with that matter said last month.
Funds controlled by Westpac Banking Corp (WBC).-owned Hastings Funds Management, together with Ontario Teachers’ Pension Plan, acquired the Sydney desalination plant for A$2.3 billion last year. Located at Kurnell, on the edge of Botany Bay in south Sydney, the plant sources water from the Tasman sea and can produce 15 percent of greater Sydney’s annual requirement. According to its website, it’s been shut since July 2012.
The original loan being refinanced is split into maturities of three and five years, and lenders include Australia & New Zealand Banking Group Ltd. (ANZ), Bank of Tokyo-Mitsubishi UFJ Ltd., Commonwealth Bank of Australia (CBA), Credit Agricole SA (ACA), Export Development Canada, HSBC Holdings Plc, Morgan Stanley, National Australia Bank Ltd., Royal Bank of Canada, Sumitomo Mitsui Banking Corp. and Westpac Banking Corp., according to data compiled by Bloomberg.
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