Law firm advises on PPP deal

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International law firm Allens has advised a Plenary-led consortium on the successful refinancing of the $1 billion Victorian Comprehensive Cancer Centre (VCCC).

The deal is significant for the Australian infrastructure funding market, which had to cope with the global financial crisis by resorting to short term financing.

VCCC, which is a public-private partnership, represents the return of the infrastructure market to long term bond financing.  Under the deal, the initial bank debt will be refinanced with a $450 million, 24-year bond involving both domestic and offshore investors. It will also involve an 11.5 year bank debt tranche.

Partner and head of debt capital markets James Darcy led the Allens team in facilitating the deal.

On the deal, Darcy said that single asset companies are increasingly aiming to diversify their debt through the capital markets.  “Since the global financial crisis, Australian infrastructure has predominantly been funded through shorter term bank debt,” he further observed.

“We are now seeing increasing activity from infrastructure companies seeking diversification in the debt capital markets, both domestically and offshore. This is particularly the case for brownfield assets with an operating history and predictable cash flows, such as VCCC,” Darcy concluded.

Allens leads in bond financing for infrastructure projects in Australia, providing advising across sectors such as toll roads, ports, energy and social infrastructure.

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