ACWA Power Management and Investments One Limited’s $814 Million Bond Offering

Shearman & Sterling represented the syndicate of banks led by Citigroup Global Markets Limited and Jefferies International Limited, as joint global coordinators and joint bookrunners, China Construction Bank Corporation, Singapore Branch, Mizuho International plc, NCB Capital Company and Standard Chartered Bank as joint bookrunners, and MUFG Securities EMEA plc and SMBC Nikko Capital Markets Limited as co-managers, in connection with ACWA Power Management and Investments One Limited’s (“Issuer”) offering of US$814 million aggregate principal amount of 5.95% senior secured bonds due 2039.

The Issuer is a DIFC-incorporated, wholly owned subsidiary of International Company for Water and Power Projects (“ACWA Power”), the largest private power generator and desalinated water producer in the Kingdom of Saudi Arabia.

The unique transaction structure allows ACWA Power to monetize its dividend cash flows from stakes held in the project companies by offering investment-grade bonds rated under the traditional project finance methodology. The bonds are secured by ACWA Power’s pro rata cash flows from the eight power generation and water desalination plants in the Kingdom of Saudi Arabia and pledges over the shares of the Issuer and ACWA Power’s Saudi holding company. This bond structure is believed to be the first of its kind and allows ACWA Power to issue Shari’a compliant trust certificates (Sukuk) in the future.

The offering is designed to enable ACWA Power to diversify its sources of financing, raise longer maturity capital commensurate with the maturity profile of its asset base, repay certain existing facilities and enhance its funding flexibility. The offering represents a transformational moment for ACWA Power and marks a key milestone in the evolution of corporate Saudi Arabia.

The Shearman & Sterling team was led by partners Marwa Elborai (Picture) (London-Capital Markets) and Iain Goalen (London and Dubai-Finance); counsel Pawel Szaja (London-Capital Markets) and Moyn Uddin (Dubai-Finance); and associate Ellaine Gelman (London-Finance).

Other key members of the Shearman & Sterling team included partners Marwan Elaraby (Abu Dhabi-Mergers & Acquisitions), Ben Shorten (Singapore-Project Development & Finance), Robin Bayley (Abu Dhabi-Project Development & Finance), Sanjarbek Abdukhalilov, Dr. Sultan Almasoud (both Dr. Sultan Almasoud & Partners in Saudi Arabia-Corporate), Nathan Greene (New York-Investment Funds), Bjorn Bjerke (New York-Finance), Kristen Garry (Washington, DC-Tax) and Simon Letherman (London-Tax); counsel Brendan Hundt (Abu Dhabi-Project Development & Finance) and Mehran Massih (London-Environment); and associates Joseph Hutchinson, Oscar Lopez (both London-Capital Markets), Ibrahim Bakhurji , Evelina Petraviciute (both Abu Dhabi-Project Development & Finance), Nicolas De Clercq, Amit Kanda (both London-Project Development & Finance), Samuel Ogunlaja (Abu Dhabi-Project Development & Finance), Sarah Moir-Porteous (London-Tax) and Devon Yamauchi (Washington, DC-Tax). Associate Ana Stefanovic-Grbec (London-Capital Markets) and trainees Hannah Drake, Joe Ohlson, Oliver Ison, Agostino Bignardi, Frances Burchall, Gartan Tracey and Adam Quigley also assisted on the transaction.

Involved fees earner: Marwa Elborai – Shearman & Sterling; Pawel Szaja – Shearman & Sterling; Marwan Elaraby – Shearman & Sterling; Joseph Hutchinson – Shearman & Sterling; Oscar Lopez – Shearman & Sterling; Ana Grbec – Shearman & Sterling; Iain Goalen – Shearman & Sterling; Moyn Uddin – Shearman & Sterling; Ellaine Gelman – Shearman & Sterling; Ben Shorten – Shearman & Sterling; Robin Bayley – Shearman & Sterling; Sanjarbek Abdukhalilov – Shearman & Sterling; Sultan Almasoud – Shearman & Sterling; Nathan Greene – Shearman & Sterling; Bjorn Bjerke – Shearman & Sterling; Brendan Hundt – Shearman & Sterling; Ibrahim Bakhurji – Shearman & Sterling; Evelina Petraviciute – Shearman & Sterling; Nicolas de Clercq – Shearman & Sterling; Amit Kanda – Shearman & Sterling; Samuel Ogunlaja – Shearman & Sterling; Kristen Garry – Shearman & Sterling; Simon Letherman – Shearman & Sterling; Sarah Moir-Porteous – Shearman & Sterling; Mehran Massih – Shearman & Sterling;

Law Firms: Shearman & Sterling;

Clients: Citigroup Global Markets Ltd; Jefferies; Mizuho; Standard Chartered Bank; Smbc Nikko Capital Markets Limited; China Construction Bank Corp.; NCB Capital; Mitsubishi UFJ Financial Group;

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Author: Michael Patrini.