Ontario Teachers Helps Refinance A$1.65 Billion Water-Plant Loan

Ontario Teachers’ Pension Plan and Hastings Funds Management Pty have refinanced A$1.646 billion ($1.54 billion) of loans used to purchase the lease on a Sydney desalination plant, according to data compiled by Bloomberg.

SDP Finco Pty, the borrowing vehicle jointly owned by Ontario Teachers and Hastings, split the refinancing into four tranches with maturities of two, three and five years, the data show. The money was used last year to buy a 50-year lease over the installation, which has been shut since July 2012. Ten banks were involved in the refinancing, the data show.

AquaSure Pty, builder of Australia’s largest desalination plant, is also in talks to refinance A$3.7 billion of loan facilities backing its project, the company said in July. Australia’s central bank has cut the benchmark interest rate to a record low 2.5 percent as it seeks to shore up the domestic economy amid a waning mining-investment boom.

Ontario Teachers owns 50 percent of Sydney Desalination Plant Ltd., while the remainder is controlled by two funds managed by Westpac Banking Corp.’s Hastings, according to the plant’s website. The companies bought the installation last year for A$2.3 billion. RBC Capital Markets advised on the refinancing, a person familiar with the matter said on Aug. 14.

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. It’s been shut since July 2012, according to its website.

Lenders on the refinancing were Australia & New Zealand Banking Group Ltd., Bank of Tokyo-Mitsubishi UFJ Ltd., Commonwealth Bank of Australia, Export Development Canada, HSBC Holdings Plc, Morgan Stanley, National Australia Bank Ltd., Royal Bank of Canada, Sumitomo Mitsui Banking Corp. and Westpac Banking Corp., the data show.

AquaSure’s borrowing costs for its plant which 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.

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